Arista Networks Slumps 4.4% to $86.27 Amid Technical Breakdown

Arista Networks declined 4.40% to $86.27 in the most recent session, accompanied by elevated volume of 13.8 million shares. This substantial down day extends the bearish momentum observed in prior sessions, pressing the stock toward critical technical levels. The following analysis evaluates key indicators across the prescribed framework.
Candlestick Theory
The price action reveals a significant support zone near $85.77-86.27, marked by today's low and 2025-05-29's swing low. Resistance is evident at $91.23 (today's high) and $95.77 (June 12 high). The recent three-session pattern – a long-red candle followed by a doji and another red candle – signals persistent selling pressure. Sustained trade below $85.77 may trigger accelerated declines toward the $77-80 support shelf established in April.
Moving Average Theory
The 50-day moving average (currently ~$89.50) crossed below the 100-day MA (~$93.20) last week, confirming a bearish intermediate shift. Both remain well above the 200-day MA (~$84.00), revealing a negatively stacked momentum structure. With the current price trading 3.6% below the 200-day MA, this long-term trendline becomes critical support. A decisive break below the 200-day MA would indicate entrenched bearish control.
MACD & KDJ Indicators
MACD histogram readings have remained negative since early June, with the signal line hovering near -1.80, signaling sustained bearish momentum. KDJ shows %K (currently 24) and %J (18) deeply oversold, though previous oversold conditions in late May failed to generate meaningful rebounds. This KDJ-MACD alignment suggests weak bullish reversal potential. Any recovery attempt would require MACD histogram improvement and %K rising above %D.
Bollinger Bands
Volatility expanded sharply as price breached the lower Bollinger Band ($89.20 zone) on June 20. The bandwidth has widened by 38% since June 10, indicating elevated selling pressure. Today's close below the lower band typically suggests oversold conditions, but extended stays below this level can signal continuation patterns. Watch for band contraction coupled with price stabilization above $86.50 to indicate potential mean reversion.
Volume-Price Relationship
Distribution patterns dominate with above-average volume accompanying recent down days (13.8M shares on June 20 vs. 90-day avg ~9.2M). The volume surge on the June 17 breakdown (-5.69% on 11.8M shares) validated bearish momentum. Conversely, advances have occurred on diminishing volume, suggesting weak buying conviction. For reversal confirmation, watch for up days supported by volume exceeding the 10-day average.
Relative Strength Index
The 14-day RSI (31.8) approaches oversold territory but hasn't yet reached the sub-30 extremes that signaled prior short-term bottoms. The current RSI slope shows minimal positive divergence despite the recent drop, indicating persistent downward momentum. Caution is warranted as RSI can remain oversold during strong downtrends. A bullish signal would require RSI breaking above 45 alongside price stabilization.
Fibonacci Retracement
Applying Fib levels to the $64.37 (April 4 low) to $98.22 (May 14 high) rally shows critical thresholds: The 38.2% retracement ($85.30) aligns precisely with today's low, while the 50% level sits at $81.30. The recent failure to hold the 23.6% level ($93.11) as support turned this zone into resistance. A daily close below $85.30 exposes the 61.8% retracement at $77.25.
Confluence and Divergence
Confluence appears at the $85-86 zone, where Fibonacci support (38.2% retracement), the 200-day moving average, and swing lows converge. This creates a pivotal technical region where buyers may attempt stabilization. Bearish divergence exists between price and RSI, with RSI holding above its May low despite the price setting new interim lows. The oversold KDJ signals contrast with the bearish MACD crossover, reflecting market indecision.
Conclusion
Multiple indicators corroborate Arista's bearish near-term posture. The $85-86 support zone represents a critical inflection point – holding this level could enable technical consolidation, while failure may trigger accelerated selling toward the $77-81 Fibonacci and volume support cluster. Recovery attempts would require reconquering the 200-day moving average ($84) with volume confirmation and subsequent close above $91.23 resistance. Traders should monitor Bollinger bandwidth contraction and RSI divergences for reversal signals, but current momentum favors caution until stabilization above the 200-day MA materializes.