If you're looking for a potential trade to kick off the new (though shortened) trading week, then put Amarin Corporation plc (NASDAQ:AMRN) at the top of your watchlist. Though it's been working on a turnaround for a few weeks, today may well be the day AMRN actually gets all the way over the hump and turns into a reliable mover.
For those not familiar with the company, AMRN is a biopharma outfit. Its claim to fame is a drug called VASCEPA, which is designed to lower triglyceride levels. It's the only FDA-approved omega-3 fatty acid, which was the basis of lots of proverbial eye-rolling a couple of years ago. A couple of years ago, some investors - as well as some competing drug companies (not to mention a few "in the know" dietary supplement users - were all shocked, surprised, and even a little miffed the Food and Drug Administration would actually approved a glorified fish oil when the near-equivalent was available over the counter in a lot of ways at a lot of places. Nonetheless, Amarin Corporation plc clearly made a compelling case to the FDA, and the drug's only available by prescription.
As fans of the stock now know all too well, however, an approved drug is one thing - selling it and turning it into revenue is another. Amarin Corporation didn't actually start driving sales until the first quarter of this year, and only proved it could grow revenue in the second quarter of this year when the top line grew from Q1's $2.34 million to Q2's $5.5 million. That first glimmer of hope from the company's key product, however, was enough start a chain reaction from AMRN shares that would eventually turn the stock into a decisive trading opportunity.
The initial bullish clues here are the obvious ones, like the fact that the stock's been rising since early August, and as of late last week moving above the 100-day moving average line (gray). AMRN hasn't made much visible progress since getting over that hump, but moving above the 100-day line is a big deal in and of itself. On the flipside...
While the bullish momentum is solid and a key technical moving average line has been cleared, one more good nudge would get Amarin Corporation plc shares all the way over the proverbial hump. That hump is $6.49, where AMRN peaked on Thursday. If shares can move above that mark, it may well seal the deal on the budding breakout effort so far, and really free the stock up to start rallying.
Yeah, it may not be ready for primetime just yet, but it's close... too close to not start keeping tabs on it now. Amarin shares need to be on your radar now, 'cause when-and-if AMRN clears $6.49, it may race out of reach very, very rapidly.
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