Key Takeaways

ServiceNow ( NOW ) shares surged in extended trading on Wednesday after the enterprise software provider posted better-than-expected quarterly results and issued a subscription revenue outlook that surpassed Wall Street expectations.

Through Wednesday’s close, ServiceNow shares had lost nearly a quarter of their value since the start of the year, weighed down in part by concerns that the company’s revenue could take a hit from the Trump administration’s efforts to rein in government spending.

The uncertainty surrounding Trump's plans for tariffs is also a concern for businesses, but ServiceNow CFO Gina Mastantuono said she's “very confident" in the company's "ability to navigate these rapidly evolving times,” Barron's reported. She added that demand signals from business leaders remain strong.

ServiceNow shares rose more than 10% in after-hours trading to about $898.

Below, we take a closer look at Service Now’s chart and apply technical analysis to identify crucial post-earnings price levels worth watching out for.

Descending Channel Breakout

Since completing a double top in late January, ServiceNow shares trended lower within a descending channel for several months before breaking out above the pattern’s upper trendline on Wednesday, setting the stage for a bullish trend reversal .

Importantly, the relative strength index (RSI) confirms bullish momentum, though the indicator remains well below overbought levels, giving the stock ample room to climb.

Let’s identify three crucial overhead areas on ServiceNow’s chart worth watching and also point out an important support level to eye during pullbacks .

Crucial Overhead Areas Worth Watching

The first higher level to watch sits around $900. The shares could encounter overhead resistance in this area near a trendline that connects a range of comparable price action on the chart extending back to last September.

A convincing close above this level may fuel a move to the psychological $1,000 level. Investors who have purchased shares at lower prices could look for profit-taking opportunities in this region near the mid-February countertrend peak, an area that closely aligns with a minor retracement in the stock last November.