Pure Storage for a Pure Play Higher

• Posted by Greg Harmon
• on September 19th, 2016

If you look for images of Pure Storage ($PSTG) you get pictures of spacemen walking and race cars like the one above. So clearly this company does some fantastic work for NASA or at least NASCAR right? No, they make flash drives. Well, not exactly flash drives, but flash enterprise storage technology. I cannot for the life of me figure out how that car plugs intro my USB port though?

Luckily all I care about is the price action in the stock, not what they do. And the supply and demand for shares of this company is looking favorable in the short run. The price chart below shows why. The company went public a little less than a year ago at $17. You can see from the chart that it has spent over 80% of its short life below that price including all of 2016.

It has been trending lower since A week after the IPO and has had falling trend resistance in place since December. What makes it interesting now is that last week the price moved above that resistance. After a push higher it has been consolidating for the last 3 days in a bull flag at a spot that the price found resistance in August and where it acted as support in May. That makes it an important level.

A push over this price level at 14 would break the bull flag to the upside and give a target to 17, the IPO price. Momentum supports a push higher. The RSI is bullish and the MACD rising. And now the Bollinger Bands® are also opening to the upside. Look for a move over 14 as a second confirmation of a reversal and a spot to consider owning the stock, at least for a while.

Celebrating 5 Years

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