Walgreens Boots Alliance, Inc. (NASDAQ:WBA) shares are trading significantly higher Friday. The company posted earnings that were higher than estimates.

The stock may be breaking out and it looks like it can go even higher. This is why our team of traders and technical analysts have made it our Stock of the Day.

Walgreens reported first quarter earnings of 51 cents per share. Analysts were looking for 37 cents.

Revenue also beat estimates. Sales were $30.90 billion, which was ahead of the $29.10 billion The Street was looking for.

When a stock is trending higher, there are more shares to be bought than sold. Traders and investors who wish to acquire shares are forced to bid premiums to get sellers interested. This results in an uptrend.

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But when a stock reaches a resistance level, the dynamic changes. There is a large amount of sell orders. People can buy as many shares as they want without having to push the price higher.

As you can see on the chart, $11 has been resistance for Walgreens. In October and December when it reached this level, the rallies ended.

Sometimes, a stock sells off after reaching resistance. This happens when some of the sellers who created the resistance start to undercut each other. They know the buyers will go to whoever wants to sell at the lowest price.

These sellers don't want to miss the trade, so they reduce their offering prices. Other sellers see this and do the same. This undercutting can result in a snowball effect that pushes the price lower.

But sometimes when a stock reaches a resistance level, the buyers eventually overpower the sellers and push the price above the resistance. When this happens, traders say it is a breakout.

This shows people who created the resistance with their sell orders have left the market. They have finished or canceled their orders.

Buyers will once again be forced to bid premiums to draw sellers back into the market. This can result in a new uptrend forming, and it may be about to happen with Walgreens.

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