If you point a flashlight up, then the light will reach as far as the other ends of the universe, if one has a sensitive enough measuring device, so long as it is not absorbed. Of course, said device might require a lot of work, and a huge telescope. Lights can easily be seen by satellites, but it would take a huge telescope to see a single light from, say, the Moon, and even larger the further you go.
In the case of your moving light, I would suspect a laser of some kind. Lasers are focused enough where one could easily see a reflection from the clouds, and pretty focused as well. It could be a moving light source, such as a plane or balloon of some kind as well.