• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing

Arista Networks Is In a Sharp Decline With No Nearby Support

Let's jump into the charts to see if there is a point or level where we might consider buying.
By BRUCE KAMICH
Nov 01, 2019 | 10:02 AM EDT
Stocks quotes in this article: ANET

Arista Networks (ANET) is the 'Stock of the Day' at Real Money, and it is plunging this Friday as traders react to its Q3 earnings report and the sharp downside revenue guidance.

Arista Networks builds scalable, high-performance and ultra-low latency cloud networks but it lost a cloud titan customer and cut its guidance.

In this daily bar chart of ANET, below, we can see that prices have been in a decline from a peak back in April. Price weakness is not new to traders and investors. ANET shares did show some improvement earlier this month as the slope of the 50-day moving average line turned positive and the 200-day moving average line continued its gradual rise from July.

Trading volume did not increase in October, telling us that there was not a strong commitment to upside. Once again the old tool of price and volume tells a story that still works in 2019 - you need to see to volume increases in the direction of the trend.

The On-Balance-Volume shows a decline from April and that signals to us that sellers of ANET have been more aggressive for several months.

The Moving Average Convergence Divergence is slightly above the zero line but that should turn bearish with today's sharp price weakness.  

 
 
In this weekly bar chart of ANET, below, we can visualize that prices will test and probably break the 2018 low around $180. Prices have been below the flat 40-week moving average line for several weeks.
 
The weekly OBV line has been neutral to bearish since the beginning of 2018 and the big picture of this chart is a large distribution or topping pattern since late 2017. The MACD is below the zero line and the two averages are likely to turn lower from here.  
 
 
In this Point and Figure chart of ANET, below, we can see a longer-term price target of $145 which was projected before ANET's bearish guidance. Interesting how charts work. 
 
 
Bottom line strategy: The top pattern on ANET did not appear overnight. The bearish signs were there for weeks if not months. ANET will be a failing knife so do not attempt to grab it.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Earnings | Investing | Stocks | Technical Analysis | Trading | Technology | Technology Hardware & Equipment | Stock of the Day

More from Investing

Royal Investing: 3 High Yield Dividend Aristocrats

Bob Ciura
Aug 13, 2022 7:00 AM EDT

Here are the three highest yielding Dividend Aristocrats available right now.

Market Whips Up a Melt-up

James "Rev Shark" DePorre
Aug 12, 2022 4:21 PM EDT

This action is primarily caused by poor positioning, rather than a sudden improvement in fundamentals.

How Charged Up Is FuelCell?

Mark Sebastian
Aug 12, 2022 3:26 PM EDT

I see some energy here, at least for a trade.

Delisting of Chinese ADRs Is Part of the New Cold War

Jim Collins
Aug 12, 2022 2:00 PM EDT

The process of dealing with a delisted stock is painful for individual investors and impossible for many institutional investors.

Inflation May Be Slowing, but That Doesn't Mean the Fed Is

Maleeha Bengali
Aug 12, 2022 1:00 PM EDT

Investors are cheering the slowing pace of inflation's increase, but prices are still way up, which means the Fed is going to continue to take liquidity out of the system.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:40 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    To Improve Your Trading and Investing, Spend More ...
  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • 01:44 PM EDT STEPHEN GUILFOYLE

    This Holding Lights Up With Strong Earnings

    Check out the latest from TheStreet's Stocks Under...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login