Arista Networks Plummets 4.15%: What's Fueling the Selloff in a High-Flying Tech Giant?

Summary
• Arista Networks (ANET) tumbles 4.15% to $125.92, breaking below its 200-day moving average of $111.64
• Intraday range of $125.77–$133.32 highlights sharp volatility amid mixed institutional activity
• Options chain surges in volume, with 23,563 contracts traded on the 11/21 expiration date
• Sector leader Cisco Systems (CSCO) drifts lower by 0.12%, signaling broader tech sector caution

Arista Networks faces a dramatic intraday selloff as the stock collapses to a 10-month low near $125.77. With technical indicators flashing bearish signals and options volatility spiking, the move raises urgent questions about the catalysts behind the decline. This analysis dissects the technical and options-driven dynamics shaping ANET's trajectory.

Bearish Breakdown: Technical Indicators Signal Short-Term Weakness
Arista Networks' 4.15% intraday drop is driven by a confluence of technical triggers. The stock has pierced its 200-day moving average ($111.64) and is trading near the lower Bollinger Band ($124.98), indicating oversold conditions. RSI at 21.53 confirms extreme bearish momentum, while the MACD (-4.07) and negative histogram (-2.54) reinforce downward pressure. Institutional selling pressure, including recent position reductions by Pacer Advisors and Duality Advisers, has amplified the selloff as traders react to the stock's 4.4% institutional underperformance over the past week.

Options Playbook: Capitalizing on Volatility with Strategic Put/Call Selection
• 200-day average: $111.64 (below current price)
• RSI: 21.53 (oversold)
• MACD: -4.07 (bearish)
• Bollinger Bands: $124.98 (lower) / $146.32 (middle)
• 30D Support: $142.99–$143.63

With ANET trading near critical support levels, the options chain offers strategic entry points. Two contracts stand out:

• ANET20251121P120 (Put): Strike $120, Expiry 11/21, IV 63.55%, Leverage 87.35%, Delta -0.2488, Theta -0.0255, Gamma 0.033875, Turnover 23,563
• ANET20251121C130 (Call): Strike $130, Expiry 11/21, IV 60.25%, Leverage 66.21%, Delta 0.3359, Theta -0.6577, Gamma 0.041115, Turnover 53,388

ANET20251121P120 offers high leverage (87.35%) and liquidity (23,563 turnover) with moderate delta (-0.2488) for a bearish play. If ANET drops 5% to $119.61, the put payoff would be $0.39 per share. ANET20251121C130 provides balanced exposure with 66.21% leverage and strong gamma (0.0411) for a potential rebound above $130. A 5% rally to $132.21 would yield a $2.21 call payoff. Aggressive traders may consider ANET20251121P120 if the $120 level breaks, while ANET20251121C130 offers upside potential if the stock rebounds above its 30D support range.

Backtest Arista Networks Stock Performance
Below is the event-backtest dashboard. It summarises how Arista Networks (ANET.N) tends to trade in the 30 days after any daily loss of at least 4 % since 2022.Key takeaways (interpreting the table you will see in the panel):• 58 plunges detected over the period. • Average performance after the shock turns positive quickly—by day 3 the cumulative excess return vs. the benchmark is already ~2 %. • Win-rate (percentage of events with positive return) stabilises around 65 – 69 % after the first week. • The edge persists: a 30-day post-event holding delivered +6.96 % vs. +6.12 % for the benchmark, though the difference is not statistically significant at traditional thresholds beyond day 2–3.Let me know if you’d like to:1. Drill into shorter/longer holding horizons.2. Add risk-control overlays (stop loss / take profit) and convert this into a trading strategy back-test.3. Compare with other stocks or broader indices.I’m happy to refine the analysis further.

Critical Crossroads: What to Watch as ANET Tests Key Support
Arista Networks faces a pivotal test as it approaches its 200-day moving average and lower Bollinger Band. The 21.53 RSI reading suggests oversold conditions, but institutional selling and bearish technicals indicate further downside risk. Traders should monitor the $120 level for ANET20251121P120 and the $130 threshold for ANET20251121C130. With sector leader Cisco (CSCO) down 0.12%, broader tech sector caution adds to the pressure. Immediate action: Watch for a breakdown below $120 or a rebound above $130 to dictate next steps in this volatile environment.