Over the past few years, cloud computing has become a hot topic. A variety of companies -- like NetSuite (N) -- have built applications that are based on Internet technologies. The result is improved productivity and lower costs.

Yet, in order to continue to propel the cloud-computing revolution, there needs to be a strong technology foundation, such as with servers, operating systems and application development tools. And one of the top players in the market is Red Hat (RHT).

Analyst Upgrades

• Red Hat (RHT) to outperform from neutral at RW Baird.
• Cogdell Spencer (CSA) to buy from hold at Citigroup.
• Micron (MU) to neutral from reduce at Nomura.
• El Paso Electric (EE) to buy from hold at Jefferies.
• MICROS Systems (MCRS) and Harmony Gold (HMY) to outperform from sector perform at RBC Capital.
• Meridian Bioscience (VIVO) to buy from hold at Canaccord.
• Verso Paper (VRS) to outperform from neutral at Credit Suisse.
• Sony (SNE) to buy from hold at Deutsche Bank.
• Noble Corp. (NE) and Baker Hughes (BHI) to buy from neutral at UBS.
• Tyson Foods (TSN) and Smithfield Foods (SFD) to buy from hold at BB&T.

U.S. stock futures are higher Thursday morning as investors await economic data. Crude oil prices surged above $106 a barrel. Futures on the Dow Jones Industrial Average rose 44 points to 12,065 and S&P 500 futures gained 5.50 points to 1,297.60. Nasdaq 100 futures jumped 16 points to 2,281.

U.S. stocks closed higher Wednesday, with the Dow Jones Industrial Average rising 0.56% to 12,086, the S&P 500 index inching up 0.29% to 1,298 and the Nasdaq 100 index gaining 0.54% to 2,698.

Data on weekly jobless claims and durable-goods orders for February will be released at 8:30 a.m. ET.

IBM (IBM) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide, and competes with firms like Oracle (ORCL) and Red Hat (RHT). IBM is also among the global leaders in business systems and competes with hardware vendors like Hewlett-Packard (HPQ) and Dell (DELL) in the server market as well as firms like EMC (EMC) and NetApp (NTAP) in the storage market.

In a recent development, IBM announced the launch of a new software and consulting service targeted at helping companies swiftly adapt to rising customer demands in today's digitally transformed marketplace. The firm chooses to call this new emerging category "Smarter Commerce," keeping in line with its Smarter Planet initiative. We have earlier discussed IBM's focus on its Smarter Planet initiative and how the firm stands to benefit from it. (See IBM's Smarter Planet Initiatives Lay Groundwork for Growth.)

CurrencyShares Japanese Yen Trust (FXY) closed up 1.2% in pre-open trading. Overall option implied volatility of 15 is above its 26-week average of 11, according to Track Data, suggesting larger price movement.

Red Hat Inc. (RHT) April 44 calls were active on 26K contracts. April and June call 40 call option implied volatility is at 43. This is compared to its 26-week average of 39 according to Track Data, suggesting traders taking positions for larger movement into Q4 results expected to be released on March 23.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Chesapeake (CHK) to buy from hold at Canaccord.
• Biogen (BIIB) and Regeneron (REGN) to outperform from sector perform at RBC Capital.
• Caribou Coffee (CBOU) to outperform from neutral and Encore Energy (ENP) to neutral from underperform at RW Baird.
• Fluor (FLR) to market perform from underperform at BMO Capital.
• Hornbeck Offshore (HOS) to conviction buy from neutral at Goldman.
• Saks (SKS) and Zale (ZLC) to neutral from underperform at BofA/Merrill.

Analyst Upgrades

• Abercrombie & Fitch (ANF) to positive from neutral at Susquehanna.
• tw telecom (TWTC) to outperform from neutral at Cowen.
• Agree Realty (ADC) to buy from neutral at Janney Capital.
• Millicom (MICC) to buy from neutral at Nomura.
• BioMed Realty (BMR) to outperform from market perform at FBR Capital.
• Realty Income (O) to buy from neutral at BofA/Merrill.

Red Hat (RHT), an open-source software business whose colleagues include Microsoft (MSFT) and Oracle (ORCL), experienced some selling pressure in yesterday's extended-hours session. The stock was off by 2.7% to $46.60. Still, the company is closer to its 52-week high of $49 than its 52-week low of $26.51.

And if you look at the chart, you'll see that the shares have been in an uptrend following a period of sideways movement. Should an investor buy this uptrend? Is yesterday's selling action a temporary phenomenon?

Analyst Upgrades

• Red Hat (RHT) and American Public (APEI) to outperform from sector perform at RBC Capital.
• KBR (KBR) and Foster Wheeler (FWLT) to buy from neutral at Goldman.
• Bio-Rad (BIO) to outperform from market perform at Leerink.
• Oceaneering (OII) to outperform from neutral at Credit Suisse.
• ASM International (ASMI) and Avid Technology (AVID) to overweight from neutral at JPMorgan.
• Dominion Resources (D) to equal weight from underweight at Morgan Stanley.
• Nationwide Health Properties (NHP) to buy from hold at Jefferies.
• Vivus (VVUS) to buy from underperform at BofA/Merrill.
• Intersil (ISIL) to buy from hold at Canaccord.

Analyst Upgrades

• Tyco Electronics (TEL) and Weight Watchers (WTW) to buy from neutral, and Smithfield Foods (SFD) to buy from underperform, at BofA/Merrill.
• Red Hat (RHT) to overweight from equal weight at Morgan Stanley.
• Gold Fields (GFI) to overweight from neutral at HSBC.
• Novartis (NVS) to outperform from neutral and GlaxoSmithKline (GSK) to neutral from underperform at Credit Suisse.
• Dollar General (DG) to buy from hold at ThinkEquity.
• Eagle Rock Energy (EROC) to outperform from sector perform at RBC Capital.

Analyst Upgrades

• Piper Jaffray upgraded Red Hat (RHT) to overweight from neutral.
• Honeywell (HON) was upgraded to outperform from neutral at Cowen.
• Regal-Beloit (RBC) and Actuant (ATU) were upgraded to buy from hold at Jefferies.
• RW Baird upgraded MedAssets (MDAS) to outperform from neutral.
• Savvis (SVVS) was upgraded to outperform from market perform at William Blair.

Red Hat (RHT) is doing extremely well today. At the time of this writing, shares of the software entity were up nearly 12% to $41.15. Volume was great. The catalyst for all this action is the earnings report that was released yesterday after the bell.

Earlier today, the stock hit a new 52-week high of $41.48. The 52-week low for the shares is $24.78. This is a very impressive move. Looking at the one-year chart, we see that the company has broken out of a period of sideways action. Technically, the short-term players have got to pay attention to the thesis.

Analyst Upgrades

• Thomas Weisel upgraded Deckers Outdoor (DECK) to overweight from market weight following channel checks. The firm also raised its target for shares to $170 from $162.
• Deutsche Bank upgraded Amerigroup (AGP) to buy from hold as it believes the company is well positioned to benefit from health care reform. The firm upped its target for shares to $42 from $38.
• Cowen upgraded Cubist Pharmaceuticals (CBST) to outperform from neutral, citing increased conviction in Cubicin's patent exclusivity.
• OmniVision (OVTI) was upgraded to strong buy from buy at Needham.
• Take-Two (TTWO) was upgraded to buy from hold at ThinkEquity.
• Wells Fargo (WFC) was upgraded to buy from neutral at Sterne Agee.

Analyst Upgrades

• Morgan Joseph upgraded Cree (CREE) to buy from hold ahead of Tuesday's Q3 report. The firm, which has a $100 price target on the stock, expects LED demand to drive revenue growth as both China and the U.S. are increasingly strong.
• Janney Montgomery upgraded Salesforce.com (CRM) to buy from neutral on expectations the company will benefit from the migration of software to SaaS deployments. The firm upped its target price for shares to $94 from $67.
• Barrington upgraded Henry Schein (HSIC) to outperform from market perform, citing an attractive valuation, increased confidence in the outcome of the Butler-Schein Animal Health integration and improving momentum in dental equipment. The firm has a $74 price target for shares.
• Advance Auto Parts (AAP) was upgraded to buy from hold at BB&T.
• Red Hat (RHT) was upgraded to outperform from perform at Oppenheimer.
• UBS (UBS) was upgraded to overweight from neutral at HSBC.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Adobe Systems Inc. (ADBE) reported that Q1 revenue was up but earnings declined sharply, and it offered guidance.
• Best Buy Inc. (BBY) shares rallied after it topped Q4 earnings expectations and offered encouraging guidance.
• Brinker International Inc. (EAT) raised its outlook for fiscal 2010 and also increased its quarterly dividend.
• China Automotive Systems Inc. (CAAS) reported that its revenue had doubled and it beat earnings expectations.
• ConAgra Foods Inc. (CAG) Q3 earnings matched estimates and revenue was flat, and it reaffirmed its outlook.
• Finish Line Inc. (FINL) shares rallied after it reported that Q4 earnings came in better than analysts' expected.