The shares of Red Hat (RHT: sentiment, chart, options) have shaken off the broad-market weakness to rally more than 5% this afternoon, following an upgrade at Jefferies from "hold" to "buy." This could mark the start of something positive for the shares if more analysts follow in the footsteps of Jefferies. According to Zacks, RHT has earned 3 "strong buy" ratings and a whopping 12 "holds." Any additional upgrades from these holdouts could help to boost the stock significantly higher.

Meanwhile, options players are relatively optimistic when it comes to RHT. The Schaeffer's put/call open interest ratio for RHT stands at 0.31, as call open interest outnumbers put open interest by more than 3-to-1 among short-term options. This ratio is lower than all but 7% of other such readings taken during the past year, pointing to extreme levels of optimism.

From a technical perspective, the stock is poised to close its second consecutive session above resistance at its 20-day moving average. However, the security's rally has been stopped cold by resistance at its declining 10-week moving average a trendline RHT has not finished a week above since mid-August. Traders should keep a close watch on this trendline. A breach of this resistance level could signal that the shares have the strength to continue their short-term rally.