Arena Pharmaceuticals, Inc. (ARNA) is getting play today. The stock is up 27% on heavy volume after breaking through the $2 level. The day’s trading range for shares of ARNA, which remains at depressed levels, having fallen 56% year-to-date, has been between $1.69 and $2.09 per share. Over the last 4 months ARNA has lost more than 80% of its value.
Technically speaking ; more than 15 million ARNA shares have already traded hands compared to a daily average of around 7.6 million. The equity is still acting healthy on an intraday basis and continues to see a squeezing behavior as it holds the $2.00 area. However, it’s hard to say with certainty that all of the action following today’s breakout is entirely consolidative in nature. At the same time, since there is no resistance in this vicinity, an argument could be made that the stock may be on its way higher over the near-term if the bulls or higher timeframe players take today’s brake-out play and extend the move. On the other hand, if today’s spike suggest bottom, do not expect a fast rally out of here but rather a small consistent appreciation toward the $2.50 area.
Over the past 12 months Arena Pharma shares have traded between $1.69 and its 52-week high of $8.00. ARNA shares are now trading with a negative P/E to Growth Ratio of 0.06 and a negative EPS of 1.23.
Disclosure: No Position