Pure Storage (PSTG) Recently Broke Out Above the 20-Day Moving Average

Pure Storage (PSTG) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, PSTG crossed above the 20-day moving average, suggesting a short-term bullish trend.

The 20-day simple moving average is a popular trading tool. It provides a look back at a stock's price over a 20-day period, and is beneficial to short-term traders since it smooths out price fluctuations and provides more trend reversal signals than longer-term moving averages.

Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.

PSTG has rallied 8.2% over the past four weeks, and the company is a Zacks Rank #3 (Hold) at the moment. This combination suggests PSTG could be on the verge of another move higher.

The bullish case solidifies once investors consider PSTG's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 9 higher, while the consensus estimate has increased too.

Investors should think about putting PSTG on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.

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This article originally published on Zacks Investment Research (zacks.com).

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