ANET stuck within tight trading range
Arista Networks Inc. (ANET) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, ANET finished the week 7.72% higher at 218.10 after edging higher $0.14 (0.06%) today on low volume, slightly outperforming the S&P 500 (-0.01%). Today's close at 218.10 marks the highest recorded closing price since December 14, 2018. Trading up to $1.95 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Tuesday, ANET gained 1.25% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ANET as at Jan 11, 2019):
Friday's trading range has been $4.93 (2.28%), that's below the last trading month's daily average range of $8.00. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ANET. Prices continued to consolidate within a tight trading range between 214.01 and 219.13 where it has been caught now for the last three trading days.
After trading down to 214.01 earlier during the day, the share bounced off the key technical support level at 214.10 (S1). The failure to close below the support could increase that levels significance as support going forward. The stock found buyers again today around 214.01 for the third trading day in a row after having found demand at 214.10 in the previous session and at 214.03 two days ago.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 219.13 where further buy stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Arista Networks. Out of 14 times, ANET closed lower 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 78.57% with an average market move of -3.46%.