Thursday, July 29, 2010
Still Jumping in the Arena
Well, well, today Arena Pharmaceuticals jumped to $6.98 a share on volume of over 16M. Yesterday ARNA closed at $6.35. Some savvy traders made day trading dollars today. As discussed in last evening's entry, all of the options remain alive. These include day trading ARNA, waiting to short the stock at the time of the Panel meeting or buying and holding it. The salient question always is, where will the shares top off?
There's no way to know for sure, but VVUS with its obesity drug, Qnexa, hit the $13 range before crashing down. That collapse was due to a 9-6 negative Panel decision. Will ARNA fall below, equal or surpass the $13 per share value before the Panel meets? Your guess is as good as anyones. Based on the potential market (30% of Americans are overweight enough to be candidates for lorcaserin), the drug could be a blockbuster.
As with all stock plays, risk taking and potential gain go hand in hand. Tomorrow brings another twist and turn to the story. If ARNA breaks through $7 and holds, it should keep moving upwards. You pays your money and you takes your choice. So it goes. CU tomorrow.