Arista Networks' Chart Is Super Bullish

Multiple technical chart methods corroborate another rally is coming

Through The Charts

From time to time, especially in the absence of major individual stock news like earnings, conferences, or other catalysts, I go through a series of stocks and their charts, identifying the ones on the cusp of making moves. Since we're in the lull season right before earnings season kicks off, this is another opportunity to deep dive into a stock and see how its chart has fared since the last time I analyzed it and if there's any new clarity.

With that, here’s Arista Networks ANET 0.00%↑.

(Source: arista.com)

Arista Networks Chart Has Shown Good (And Confident) Correlation

This is a stock and chart I've covered pretty extensively in 2023. Thus far, it has been at the top of my list of successful calls for the year. When I initiated my buy call, both formally to Tech Cache members and with my money, Arista Networks was trading below $110. I followed through and bought at $109.67 on January 5th after waiting patiently for an entry. I planned to add if it dropped to $100, but as you know, it never got there. Returning over 45% to Tuesday's close and as much as 56% at all-time highs of $171.44 just a few weeks ago puts it firmly in the "good call" list against my standard of looking for 30%+ returns over a year timeframe.

But now, after breaking out of its channel and sustaining the all-time high levels, it begs the question, "When can I get (more) in?" Well, if you read my last major update on ANET, you'll know I expected a near-term top near the low $170s with a retreat before moving into record territory once again.

Here's what that prior article’s chart looks like today:

Several factors are working together in this chart, pointing me toward a bullish future. The first is the structure of the moves over the last eight months aligns well with a bullish MACD trend. Higher moves have mainly led to higher MACD highs, showing bulls are not tiring out throughout this move. This is noted by the green trendlines on the price chart and MACD chart. Similarly, the RSI has trended up, bringing the stock to overbought territory. This leads to the last factor. The breakout in a "straight up" manner since late January, along with the pegged overbought RSI reading, indicates an "impulse" move associated with Elliot Wave Theory third waves.

You've been reading quite a bit more about Elliot Wave Theory from me in general over the course of this year. That's because I've been seeing the correlation between what I come up with for my typical technical charts and the alignment with Fibonacci ratios. So, much of what I outline, draw, and determine support and resistances with line up not by coincidence but because of mathematical relationships.

And with ANET, the move we've seen from January till now lines up near perfectly with EWT and its Fibonacci extensions and retracements for a wave 3. Because of this alignment, I've dug deeper into the chart and created a correlating EWT analysis for ANET.