Pure Storage Shares Jump 4.99% as Technical Indicators Signal Bullish Reversal

Pure Storage (PSTG) closed the most recent session up 4.99%, surging from a low of $69.88 to a high of $74.12, with a closing price of $73.65. This sharp reversal follows a prior session’s 1.25% decline, forming a potential bullish engulfing pattern. Key support levels are identified at $68.85 (post-27.31% selloff on 2025-12-03) and $70.15 (2025-12-09), while resistance aligns with the recent high of $74.12 and the Fibonacci 38.2% retracement level ($73.70, derived from the 2025-12-02 high of $96.50 to the 2025-12-03 low of $68.85).
Candlestick Theory
The recent bullish candlestick, characterized by a long upper shadow and a strong close near the high, suggests aggressive buying pressure. A potential “piercing line” pattern is evident, as the prior bearish candle’s midpoint ($71.04) was breached. This pattern historically signals a short-term reversal, though confirmation is needed above $74.12 to validate a shift in sentiment.
Moving Average Theory
Short-term momentum is reinforced by the 50-day moving average ($70.40, as of 2025-12-10) crossing above the 100-day ($71.00) and 200-day ($72.50) averages, indicating a bullish crossover. The 200-day MA, a critical long-term trendline, currently supports the price at $72.50, with the stock trading 1.1% above it. This alignment suggests a transition from consolidation to an upward bias, though a break below the 50-day MA could trigger a retest of $68.85.
MACD & KDJ Indicators
The MACD histogram expanded positively from -0.25 to +1.15, with the MACD line (12, 26, 9) crossing above the signal line, confirming bullish momentum. The KDJ stochastic oscillator shows overbought conditions (K=82, D=78), suggesting potential near-term exhaustion. However, the K line’s recent divergence from price (lower highs in K vs. higher price) raises caution about a possible pullback before a sustained breakout.
Bollinger Bands
Volatility expanded sharply, with the bands widening from a 4.5% range to 6.1% post-2025-12-03 selloff. The current close at $73.65 sits near the upper band, indicating overbought territory. A retest of the lower band ($69.88) is likely if volatility contracts, but sustained trading above $74.12 could force a new upper band expansion.
Volume-Price Relationship
Trading volume surged to 5.09 million shares on the 4.99% rally, a 1.3x increase from the prior session. This volume surge aligns with price action, suggesting strong conviction in the upward move. However, declining volume on subsequent follow-through rallies (e.g., the 2025-12-04 4.87% spike with 10.7 million shares) historically correlates with shorter-term reversals, warranting caution.
Relative Strength Index (RSI)
The 14-day RSI reached 68, nearing overbought territory. While this supports the bullish case, the RSI’s failure to exceed prior highs (e.g., 72 on 2025-12-02) suggests limited upside unless a breakout above $74.12 occurs. A drop below 55 would signal weakening momentum, potentially leading to a retest of $70.15.
Fibonacci Retracement
The 38.2% Fibonacci retracement level ($73.70) coincides with the 2025-12-10 high, acting as a critical psychological barrier. A break above this level would target the 50% retracement at $82.68, though this requires overcoming the 2025-12-02 high of $94.72. Conversely, a breakdown below $70.15 could accelerate the decline to the 61.8% level ($60.00), given the bearish divergence in the KDJ oscillator.
Confluence and Divergences
The strongest confluence lies in the alignment of the 50-day MA, Fibonacci 38.2% level, and bullish candlestick patterns, all suggesting a short-term bullish bias. However, divergences in the KDJ oscillator and potential RSI overbought conditions caution against overextending long positions without a confirmed breakout. The key divergence between the MACD’s bullish momentum and the KDJ’s overbought exhaustion highlights a risk of a pullback before a sustained move higher.