One of the early catalyst was ARNA signing up with a marketing or sales partner.

And the second catalyst is FDA assessment of Vivus drug potential ( Note : Vivus is ARNA competitor).

The key thing to note here is good news for any of the drug company is good news for the industry. In this case, Vivus, ARNA will benefit from the same positive news.

Currently, ARNA is trading at around 4.39 and I believe there is still time to play this game. I recall ARNA is only due for review in September.

Myself, I have bought Oct $3 CALLs way back in May-June period.

Do note that as with all stocks that relies on FDA approval, there is a high chance that things do not work out well and the price will head south.

It has break through its resistance at 3.18 and has went above the Kijun sen.

At this moment, it falls short of breaking through the kumo. A break above it will signal a very strong bullish move.

Kumo resistance at 3.38

On the chart, we can see a strong bullish white candle which represent a reversal of its downtrend.

At this moment, there is no confirmation that a bullish trend has developed. We would want to see either a bullish cross from the Tenkan sen and Kijun sen or a price action that goes above its kumo resistance.

From the chart, we can see that the Tenkan sen is about to cross the Kijun sen.

The price level is also about the same as the flatten level of the leading kumo. In other words, it is not difficult to breakthrough assuming the broader market is bullish as well.

After trading hours, the price shot up to 6.58

However, price in the after trading hours are not really reflective of the actual price. ARNA opens at 4.9 on Sept 18 and it dive down to as low as 4.39

But, the surprised move comes around mid day when a sudden surge of volume push it back 5.20 , 5.30 range. Volume was extremely high that day. It was around 76M vs a 2M (average volume) at around mid-day.

It was hard for me to figure if it is the greatest pump and dump operation or not.

Cos’, on one hand, the lows of 4.39 will have signify that the uptrend was broken. But, yet, within hours, it has rally back as much as 13% to 15% and is back into the ‘uptrend’ range.

With such uncertainty, it is best to just take my profit and watch from the sidelines.

As of Sept 21, ARNA is still trading within the triangle pattern. It is still not clear if the price will break up above the resistance or if it will just break down like Sept 18 upon results.

Thinking out loud.

1. What causes the sudden drop in price on opening when the results is out?

2. What causes the rally hours later? How is the news different compared to just a few ours earlier?

3. I do not have answers to the above? From the chart, I can only say that the opening price breaks all my support level, including the kumo support on the Ichimoku chart as well as the trendline.

I am not taking my chances for now and is standing by the sideline to watch the price action. When it becomes clearer, I may take a position again.