Aruba Networks Having a Day!

Way to have a day!  Aruba Networks, Inc. (NASDAQ:ARUN) is shaking off the overall market neutral trend today and blasting away with a +16% gap up increase.  Checking their chart, we see that the stock lit up on volume near the end of May when it gapped up on May 22 from the $5 range to the $6 range.  Since that day, it appears to be almost all green lights with the stock price making progress on big volume days and generally only trading down on lighter volume days.  That should be interpreted as accumulation by institutional holders.  The stock broke its $9 resistance with the gap up today and is doing so on already greater 2X volume (with more of the trading day to go).  The gap up seems related to the upgrade by RBC Capital Markets, and now the stock is trading well above its 10-day simple moving average and 20-day exponential moving average.  Although technically speaking we would prefer that the 10-day SMA be above the 20-day EMA (it’s not), the chart still looks promising largely because the MACD indicates a nice crossover today. 

Keep your eye on this stock, but I would expect the stock to make its move, and then in a week or two we will get the news about why it made the move.  That is just the way the evil financial world works, the big investors get the news first and then us average investors get the news after the move.  We are stuck trying to interpret charts and volume, almost like we are in the Matrix or something.

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You can view the ARUN chart below or the one at StockCharts here with more technical indicators. 

Disclosure: No positions in ARUN at the time of this writing.