Chart of the Day: Watch This Key Indicator as Arista Gets a Black Eye
This stock is a casualty of the artificial intelligence beat-down, but the 200-day moving average offers clues in how to handle the stock.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Some artificial intelligence- and data center-related names were hit hard late last week as worries over growth in the uber fast sector started to make the rounds. Earnings from Oracle (ORCL) and Broadcom (AVGO) were strong but some comments about delays gave investors some pause. No question the growth in this segment is going to continue, however, it is the rate of change in that growth that is likely to slow down. This is all about the law of large numbers, eventually it catches up to these growth segments.
Our holding in the Pro Portfolio, Arista Networks (ANET) , has really done nothing wrong fundamentally, but as a member of this group the company will get hit with shrapnel when there is gunfire in the sector. ANET was blasted along with several other names; we are not quite sure they deserved this poor treatment, but the market is the market.
The technicals have shifted bearish. Money flow, as seen in the bottom pane, is weak. The candles at the top of the chart are now purple, which indicate a strong bearish trend, and the Moving Average Convergence Divergence chart is ready to cross for a bearish signal. Volume trends have turned negative as well, so we will watch the 200-day moving average to see if it provides some good support if ANET continues to decline.
We like Arista in TheStreetPro portfolio and rate it a one, buy at anytime.
