Arista Networks Posts 4.33% Surge on Bullish Reversal and MACD Golden Cross Signal

Candlestick Theory

Arista Networks (ANET) has exhibited a bullish reversal pattern in recent sessions, with a 4.33% surge on 2025-09-15 closing at 145.43, forming a strong white candlestick. Key support levels are identified at 139.02 (2025-09-12 low) and 131 (2025-09-02 low), while resistance aligns with the 2025-09-15 high of 146.9. The price action suggests a potential breakout from a descending channel, with the 145.43 close nearing the upper boundary, indicating short-term momentum favoring buyers.

Moving Average Theory

Short-term momentum is reinforced by the 50-day moving average (calculated around 138.5–140.5) crossing above the 200-day MA (approx. 115–117), signaling a bullish trend. The 100-day MA (135–137) acts as a dynamic support. However, the 200-day MA remains below the current price, suggesting a medium-term uptrend but caution is warranted if the 50-day MA dips below the 100-day MA, which could signal a weakening trend.

MACD & KDJ Indicators

The MACD histogram has shown a recent expansion, with the line crossing above the signal line (golden cross) on 2025-09-15, confirming bullish momentum. The KDJ indicator (stochastic oscillator) indicates overbought conditions (K=85, D=80), suggesting a potential pullback. Divergence between the MACD’s strength and the KDJ’s overbought reading implies caution, as exhaustion may precede a correction.

Bollinger Bands

Volatility has increased, with the bands widening after a period of contraction in late August, aligning with the recent breakout. The price is currently trading near the upper Bollinger Band (146.9), a classic overbought signal. A sustained close below the 20-day SMA (139.5–140.5) could trigger a retest of the lower band at 134.5, indicating a potential mean reversion.

Volume-Price Relationship

Trading volume surged to 12.14 million on 2025-09-15, the highest in three weeks, validating the recent price strength. However, volume declined during the prior 8.92% drop on 2025-09-12, suggesting weak bearish conviction. The current volume profile supports the sustainability of the uptrend, though a divergence in volume during pullbacks could signal waning momentum.

Relative Strength Index (RSI)

The RSI (14-period) reached 72 on 2025-09-15, entering overbought territory, which historically precedes corrections. While this does not guarantee an immediate reversal, it highlights a risk of near-term profit-taking. A drop below 50 would indicate weakening momentum, while a move above 75 could signal a continuation of the bullish phase.

Fibonacci Retracement

Key Fibonacci levels between the April 2025 low (77.56) and September high (149.47) include 126.5 (61.8% retracement) and 139.0 (38.2% retracement). The recent price action has tested the 38.2% level (139.0), which now acts as a critical support. A break below this level could target the 61.8% retracement at 126.5, while a breakout above 149.47 would validate a new bullish trend.

Backtest Hypothesis

The backtest strategy of buying ANET on MACD golden crosses and holding for 10 days yielded a 113.08% return, significantly outperforming the benchmark’s 42.71%. The strategy’s 23.42% CAGR and 0.86 Sharpe ratio underscore its robust risk-adjusted returns. Notably, the MACD signal aligns with the bullish crossover in moving averages and confirmed by volume spikes, creating a high-confluence entry. However, the overbought RSI and KDJ readings suggest caution, as the strategy’s success may depend on avoiding premature exits during overbought phases.