Arista Networks Jumps 6.62% On Bullish Technical Signals And Heavy Volume

Arista Networks (ANET) closed at $91.96 in its latest session, posting a significant gain of 6.62% on elevated volume. This strong up-move warrants a multi-faceted technical assessment using the provided historical data.
Candlestick Theory
Recent candlestick patterns for Arista Networks indicate potential bullish reversal signals. The price decline culminating on June 20th ($86.25 close, low of $85.775) formed a possible swing low, followed by consolidation and the substantial bullish engulfing candle on June 23rd. This candle closed near the session high ($92.38 high, $91.96 close) after opening near the prior day's low, overpowering the previous two days' trading ranges. Key near-term support is established around $85.50-$86.25, encompassing the June 20th low and close. Resistance is evident near the $93.50-$94.50 zone, where several recent highs cluster, notably the June 17th high of $94.6984 and the June 12th close at $95.77.
Moving Average Theory
Arista's moving averages depict a conflicted intermediate trend. The 50-day moving average (approximately $90.40 based on data density) appears near-flat, suggesting consolidation in this timeframe. The price has recently pushed above this level. However, longer-term averages show ongoing pressure; the 100-day and 200-day averages (approximating $93.80 and $105.00 respectively) remain above the current price and are trending downwards. This configuration, where shorter averages are flattening or rising but longer averages are falling, often characterizes a potential basing phase or a hesitant recovery within a longer downtrend. Sustained trade above the 100-day MA would improve the medium-term outlook.
MACD & KDJ Indicators
The MACD histogram shows a recent transition from negative to positive territory, suggesting building bullish momentum as the signal line is crossed from below. This aligns with the strong price surge on June 23rd. The KDJ oscillator, specifically the %K and %D lines, had dipped deeply into oversold territory below 20 during the June 20th sell-off. They have since crossed upwards aggressively, with %K rising sharply above 50, indicating a strong rebound in momentum. While the KDJ overbought condition (above 80) hasn't yet developed, the speed of ascent warrants monitoring for potential short-term exhaustion near key resistance.
Bollinger Bands
Volatility, as measured by the Bollinger Bands, contracted notably leading into the June 20th low, with price oscillating tightly near the lower band. The sharp expansion triggered by the June 23rd rally saw price surge from near the lower band to challenge the mid-band (typically the 20-period SMA) and even approach the upper band. This volatility expansion on an up-move confirms the breakout attempt. A close above the mid-band would be a further bullish development, while failure to hold above it may signal a false breakout.
Volume-Price Relationship
The surge on June 23rd was accompanied by significantly higher volume (~14.95M shares vs. ~9.16M and ~11.78M preceding days), providing strong conviction for the bullish reversal signal. This high-volume breakout increases confidence in the sustainability of the upward move near-term. Volume on prior down days (like June 17th and June 20th) was also elevated, indicating strong selling pressure that may have been exhausted, making the high-volume up-day more significant. Validation of the breakout requires follow-through volume on any continuation move, particularly if testing key resistance levels like $93.50-$94.50.
Relative Strength Index (RSI)
Based on the 14-period calculation, the RSI dipped into oversold territory (<30) around the June 20th low, coinciding with the price trough. It has subsequently rebounded strongly and is currently near 56 (as of June 23rd close). This places it firmly in neutral territory (30-70) with upside momentum. While not overbought (>70) yet, the rapid ascent warrants caution, especially if the RSI approaches the 70 level as price nears resistance ($93.50-$94.50). Traders should view RSI extremes as zones of potential reversals, not strict signals.
Fibonacci Retracement
Applying Fibonacci retracement to the most significant recent downswing (from the March 24th high of ~$105.87 to the April 24th low of ~$75.29) reveals key levels for Arista Networks. The critical 50% retracement sits near $90.58, a level decisively breached on the high-volume June 23rd session. This breakout above the 50% level is technically constructive. The subsequent major retracement level is the 61.8% mark near $93.38, converging neatly with the key horizontal resistance zone around $93.50-$94.50 identified via candlestick analysis. Reclaiming the 61.8% level would significantly strengthen the bullish case. The 38.2% retracement (~$87.67) now serves as important support below the 50% level.
Confluence and Divergence
Significant confluence exists between technical perspectives at the $93.50-$94.50 resistance zone: the horizontal price resistance from recent highs, the 61.8% Fibonacci retracement level ($93.38), and the resistance implied by the falling longer-term moving averages (100-day near $93.80). A sustained breakout above this area, preferably on strong volume, would signal a robust shift in momentum and target higher Fibonacci levels towards $97-$100. Prior to the June 23rd surge, a positive divergence emerged: KDJ formed higher lows in the days before the rebound while price made a marginal new low ($85.775 on June 20th vs. $85.58 June 23rd low), foreshadowing weakening downside momentum. Overall, technicals suggest Arista is attempting a recovery, with the successful breach of the 50% Fibonacci and the high-volume surge pointing towards potential for further upside, provided it can overcome the significant resistance convergence around $93.50-$94.50.