Unfortunately, we have not visited with Arista Networks, Inc. (ANET) much. We only looked at the daily chart way back at the end of 2015, when we only had a relatively small amount of trading history. At that time, we suggested, "With prices headed to the upside as we finish the year and head into 2016, we look for another test of the $85-to-$90 area. We don't know if ANET will overcome overhead resistance in the weeks ahead, so we prefer to stand on the sidelines. Granted, you cannot make money on the sidelines, but we will be keeping ANET on our market minder."
Now that prices have been trading for a while (read soaring), another look is warranted, as prices eventually overcame the resistance around $90. The stock price has done extremely well in the past twelve months, so it is always good to take stock and review strategy.
In this updated daily bar chart of ANET, above, we can see that prices are above the rising 50-day moving average line and above the rising 200-day line, as well. The On-Balance-Volume (OBV) line has been trending higher in the past year, telling us that buyers of ANET have been more aggressive, with heavier volume totals on days when the stock has closed higher and lighter volumes on days when ANET retreated. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since February and tells us the uptrend is strong.
In this weekly bar chart of ANET, we can see the sideways base pattern from December 2014 until August 2016. Prices have more than tripled from their $75 base area. ANET is above the rising 40-week moving average line, maybe too far above it. The weekly OBV line has been in a strong advance since March 2016 and confirms the rally. The weekly MACD oscillator is also bullish and shows no signs of a correction yet.
In this Point and Figure chart of ANET, above, we can see the big rally and a possible longer-term price target of $373. Yes, $373 and not $273.
Bottom line: While it is nice to think about a rally to $373, it is smarter to think about risk. Investors in ANET with a good trade location should consider having a sell stop at $185 now. ANET is likely to have either a sideways correction -- or a sideways-to-lower correction, considering how far it is above the 200-day moving average line. A pullback to $225 or lower would be "normal" and not disturb the longer-term uptrend.