Pure Storage (PSTG) Just Overtook the 20-Day Moving Average

Pure Storage (PSTG) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, PSTG broke through the 20-day moving average, which suggests 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.

The 20-day moving average can show signals that are similar to other SMAs as well. 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 12.2% 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 only gets stronger once investors take into account PSTG's positive earnings estimate revisions. There have been 9 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research