Have a Look at the Arena Before You Step Into the Super Bowl Dome

Arena Pharmaceuticals, Inc., a biotech with about a $1.5 billion market cap, has been consistently exuding relative strength in recent sessions amid a market full of whipsaws. Typically, we would expect a high beta biotech like ARNA to get hit worse than most during market dips or corrections, through no fault of its own since it is, after all, a risky bio. 

However, when we see names like ARNA largely ignore market volatility and even the post-State of the Union healthcare selling we saw yesterday in IBB XBI, it makes the Arena relative strength all the more impressive (and perhaps even suspicious of a major announcement or deal lurking). 

On the ARNA daily chart, below, you can see the stock setting back up on the long side in the context of an uptrend. The stock has formed lower highs but higher lows since the initial pop after New Year's, and may be ripe to resume its strength now. 

As I write this, volume on the session is still thin for ARNA, and the broad market is choppy. However, if the stock can push over $38 when more volume comes in I would take a serious look at it long the long side given how aloof it has been in the face of broad market and biotech selling this week.