Despite a Strong Earnings Report, This Tech High-Flyer Is Still Falling

[Trading With Larry Benedict]( Despite a Strong Earnings Report, This Tech High-Flyer Is Still Falling By Larry Benedict, editor, Trading With Larry Benedict One stock that’s ridden this year’s big tech resurgence is Arista Networks Inc (ANET). ANET started the year strong with a nearly 60% rally in the first quarter… However, when we last [checked in on it]( in early April (red arrow in the chart below), it was showing signs of overheating. Since then, ANET has steadily drifted lower. And even with the release of a strong earnings report a week ago, ANET has gapped lower. It’s now testing a key level. So, today, I want to see what’s in store from here… Recommended Link [“One-Stock Millionaire” IGNORES 99.9% of the Market]( [image]( During the 2008 financial crisis, millionaire trader Jeff Clark stunned the world when he managed to double his readers’ money 26 TIMES… CNBC caught wind of this and asked Jeff to come on live TV to explain his secret. Jeff politely said no. And now, years later, Jeff is back to finally bring this secret into the light. …Revealing how anyone can collect huge gains in just 8 days… in bullish AND bearish markets! And why you need to IGNORE 99.9% of the market, instead focusing on only ONE stock. [(ticker revealed here)]( Jeff says: “I am tired of watching as investors lose their shirts buying risky assets… even my OWN SON lost -60% in crypto & tech stocks… now I’m going to give him a [“Financial Intervention”]( to help him win his account back in 2023!” [Click Here to Watch Jeff Demonstrate This ONE Stock Secret.]( -- Momentum Reversal The chart of ANET below shows a classic uptrend in action… The 50-day moving average (MA, blue line) has steadily climbed since mid-2022 as ANET made a series of higher highs and (higher) lows. ANET’s rally then began to accelerate as we rolled into 2023… Arista Networks Inc (ANET) [Image] Source: e-Signal Each of those rallies to higher highs began with two common bullish signals… - The Relative Strength Index (RSI) formed a ‘V’ (red circle) and rallied from oversold territory (lower gray dashed line). ANET then rallied as the RSI began to move higher. - The 10-day MA (red line) broke above the 50-day MA, confirming the up leg. We saw this pattern with ANET’s rally to the August 2022 peak (‘1’)… the move to the December peak (‘2’)… And most recently in the rally to the all-time high it set in March this year (‘A’). Note how both MAs moved sharply higher in this last rally after they crossed over… ANET topped out at ‘A’ with the RSI deep into overbought territory (upper gray dashed line). When we last checked in on April 3, I noted if the RSI continued to track lower that we would likely see ANET drop further… At the time, the 10-day MA looked as though it, too, had topped out. From there, if the 10-day MA crossed down below the 50-day MA, it would have further confirmed any down move. And that’s exactly how things played out… The RSI has steadily fallen from its all-time high (orange line). And following the market’s negative reaction to ANET’s earnings last week, the 10-day MA fell sharply below the 50-day MA. With the RSI now in oversold territory (far right red circle), what am I looking for around here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Building a Base The RSI has gone into oversold territory… But it doesn’t necessarily mean ANET will bounce. For ANET to rally, the RSI needs to establish a base and steadily move higher. The next test would see the RSI break through resistance (green line) and re-establish itself in the upper half of its range… This, along with the 10-day MA crossing back above the 50-day MA, could see ANET fill in the gap from its May 2 earnings report. But this move isn’t guaranteed… If instead the RSI tracks sideways and remains stuck in its lower band, ANET will remain vulnerable… And that will potentially set it up for another leg down. Regards, Larry Benedict Editor, Trading With Larry Benedict IN CASE YOU MISSED IT… [Man who warned of Russia invading Ukraine releases a new set of predictions]( Geopolitical expert and best-selling author Peter Zeihan has just released a startling new set of predictions in his latest book, The End of the World Is Just the Beginning. The first printing completely sold out, but you can [get it now right here.]( [Click here now.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](