Signal Says Pure Storage Stock Could Bounce by January

Computer hardware stock Pure Storage Inc (NYSE:PSTG) is 1.5% higher to trade at $69.90 this afternoon, attempting to pare back some of its post-earnings bear gap, which sent it 27.3% lower yesterday. While not the first post-earnings selloff the shares have suffered, it comes just weeks after a Nov. 3. record high of $100.59. There is no reason to panic, however, as a historic bull signal just began flashing.

Per Schaeffer's Senior Quantitative Analyst Rocky White, the stock is within 3% of the 12-month moving average, after remaining above it for the last five months. This signal has occurred five other times in the past two decades, after which the stock was higher one month later 80% of the time with an average 7% gain. A move of similar magnitude would put the shares back above $74 by the start of 2026.

Meanwhile, short interest is on the rise, up 40.9% during the past two reporting periods. The 9.29 million shares account for 3% of the stock’s available float, or nearly three days' worth of pent-up buying power.

Options look like the affordable way to go, too. This is per the stock's Schaeffer's Volatility Index (SVI) of 55% that stands higher than 31% of all other readings from the past year, implying near-term option traders are pricing in relatively low volatility expectations.

What's more, PSTG's Schaeffer's Volatility Scorecard (SVS) checks in at 86 out of 100. In other words, the security has consistently realized higher-than-anticipated volatility over the past 12 months.