Pure Storage, Inc. (PSTG) shares rose more than 5% during Wednesday's session after Raymond James upgraded the stock from Market Perform to Outperform and raised its price target to $22 per share – a 20% premium to the opening price for the day. Analyst Simon Leopold's channel checks suggest that sales have continued to grow at a double-digit pace and may outperform current estimates.

The comments come shortly after Goldman Sachs upgraded the stock to Buy from Neutral and issued a $21 price target on the stock on Oct. 10. Morgan Stanley and Piper Jaffray also have price targets of $21 on Pure Storage stock since the company's investor event in mid-September showed continued market share gains, new offerings that could improve visibility, and a 140% net retention rate. The company's next quarterly earnings date is Nov. 18, 2019, when investors could see the next big catalysts.

Chart showing the share price performance of Pure Storage, Inc. (PSTG)
TrendSpider

From a technical standpoint, the stock broke out from its 200-day moving average at $17.97 to retest reaction highs of around $18.50 in mid-September. The relative strength index (RSI) rose toward overbought levels with a reading of 66.48, but the moving average convergence divergence (MACD) experienced the start of a bullish crossover. These indicators suggest that the stock could consolidate before moving higher.

Traders should watch for a breakout from trendline resistance before experiencing consolidation above the new support level. If the stock continues its move higher, traders could see a move to close the gap dating back to late May at around $20 per share. If the stock fails to break out, traders could see a move back down to the 50-day moving average and trendline support near $16.10 per share – although momentum has turned bullish.

The author holds no position in the stock(s) mentioned except through passively managed index funds.