Buy the Dip on This Computer Networking Stock

Shares of computer networking firm Arista Networks Inc (NYSE:ANET) are experiencing a pullback, last seen down 4.1% at $94.28 and on track for their fourth consecutive daily decline. The stock is also fresh off its third-straight week of losses and is down 15.2% year-to-date. However, a potential breakout may be on the horizon as ANET has recently encountered a historically bullish trendline.

Per Schaeffer's Senior Quantitative Analyst Rocky White, ANET has come within striking distance of its 200-day moving average after a lengthy period above it (defined by White as 80% of the time over the past two months and 8 of the last 10 trading days).

This pattern has emerged five times in the past three years, with the stock gaining an average of 14.4% one month later in 86% of those instances. A similar rebound from its current level would push Arista Networks stock to $107.86, further strengthening its 40% year-over-year gain.

Additionally, the equity’s 14-day relative strength index (RSI) of 27.1 signals an "oversold" condition, which typically precede a short-term bounce. For traders looking to capitalize, options appear attractively priced, too. ANET's Schaeffer's Volatility Index (SVI) of 48% ranks in the 14th percentile of its annual range, indicating that options traders are currently expecting low volatility.