Technicalspeculator.com’s Trade-of-the-Week: Arena Pharmaceutics (ARNA)

By Tech_Spec
25-May-2019 4:28:55 PM
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This week’s trade comes from the healthcare sector, biotech industry of NASDAQ.  Fundamentally, what caught our eye was the quarterly revenue growth (yoy) of 45,544.30%!  An extraordinary large increase.  Technically, an stock that is making new highs is of interest.

Company profile: Arena Pharmaceuticals, Inc., a biopharmaceutical company, focuses on providing novel medicines with pharmacology and pharmacokinetics to patients worldwide. Its investigational clinical programs include ralinepag (APD811), which is in Phase III trial to treat pulmonary arterial hypertension; etrasimod (APD334) for ulcerative colitis, and Crohn’s disease, as well as for atopic dermatitis and other indications; and Olorinab (APD371), which is in Phase II trial for the treatment of gastrointestinal pain.

It is also developing APD418, a calcium-independent myofilament derepressor for the treatment of decompensated heart failure. The company has collaboration agreements with United Therapeutics Corporation; Everest Medicines Limited; Axovant Sciences GmbH; Outpost Medicine LLC; CY Biotech Company Limited; Boehringer Ingelheim International GmbH; Eisai Co., Ltd.; and Eisai Inc. Arena Pharmaceuticals, Inc. was founded in 1997 and is based in San Diego, California.

Fundamentals:

Trailing P/E: 4.32, Forward P/E: -10.78

EPS: 12.49, Beta: 1.46, PEG: -0.26

P/S: 3.28, P/B: 2.15

Profit margin: 76.19%, Operating margin: 76.51%

ROA: 38.78%, ROE: 68.14%

Qrtly revenue growth: 45,544.30%

Additional fundamental data: https://finance.yahoo.com/quote/ARNA/key-statistics?p=ARNA

Technicals:

Just broke out of a 15-month consolidation

New 52-week high

Buying momentum is positive and rising. Buying volume is neutral

Above the rising 50-week m/a 1st support level is $51

The safety stop is at $48.25

The target is $61.50

Suggested buying approach: Buy a half position now.  When the stock closes above $56, buy the other half position. Always use a 3% trailing stop.

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Author: Tech_Spec

Canada’s only Master of Financial Technical Analysis (MFTA). This 4 – 5 year program offered by the International Federation of Technical Analysts (IFTA) in England is regarded as the global standard. • Instructor of Technical Analysis for the Canadian Securities Institute (CSI). My role is teaching market analysis to industry professionals. • Financial Technical Analyst offering 25 years experience in the financial and investment service industry. • Editor and owner of the Technicalspeculator.com, an on-line independent financial market research and newsletter website. • Registered Securities Advisor

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