Amarin Corporation plc (ADR) (NASDAQ: AMRN)
Amarin stock had a rough day Friday, following the release of their most recent earnings report. However, the stock seems to be recovering today. So, we’ll take a look to see if we can find a reason for the climb today, talk about what’s happening in the market, and discuss what we can expect to see from AMRN in the future. Let’s get right to it!
Why Is AMRN Climbing Today?
What I think we’re seeing is a natural correction in the market. As we all know, price movements in the market are a series of overreactions leading the price higher than or lower than it should be in most cases. So essentially, investors overreacted to the poor earnings report; ultimately driving the price of Amarin lower than it should have gone. As a result of the overreaction, the stock reached support and started to pop up again. However, it’s important to remember that today’s spike is likely an overreaction in the positive direction. Nothing more than trading high on high volume.
What We’re Seeing In The Market Today
As mentioned above, Amarin has started to see gains in the market today; leading many to believe that a recovery from Friday’s declines will be short work. Currently (1:30), AMRN is trading at $1.93 per share after a gain of 4.32% so far today.
What We Can Expect To See Moving Forward
Moving forward, I think the outlook will depend on how far forward you plan to look. Here’s how I see it…
- Short Term – From a technical perspective, my opinion is that AMRN is a short term disaster waiting to happen. The company declined following earnings, and we’ve seen a slight correction from that today. However, a clear flag is forming in the chart and while we’re moving up right now; when this thing breaks out, I think it’s going to go in the negative direction. So, I’m not impressed with the short term outlook of this stock.
- Long Term – In the long run, I have a very different, and quite positive opinion of what we can expect to see from Amarin stock. The company is making important moves in the right direction in an attempt to extend coverage of it’s most important brand, Vascepa. Most recently, Amarin contracted coverage with Humana; and we can expect to see more and more contracts coming on board in the long run. With that said, smart investors will be looking for a decent pull back for a great long term buying opportunity.
What Do You Think?