Amarin Corp Plc (AMRN)

[FlyFishingStocks]

Bear trap, bull trap…
Markets are riddled with deceptive traps for both bears and bulls.
When confused as to what’s happening and why, it pays to follow the money. Who is Amarin management beholden to? Of course, it’s those who have loaned them millions to stuff their pockets with cash. They are the orchestraters of the recent price moves IMO.
Isn’t it curious how the SPA rules changed just prior to the first interim announcement (A)? Then out of nowhere they convert loans to equity (B) - loans that were hedged with shorts:



After announcing continuation (C), this chain of events was set in motion:
1. Converted shareholders used their shares to cover hedged short trades once the share price had drifted to profitable levels - down to triple support (D). The decision to continue is what induced the sell off to help these investors unwind their shorts.
2. Retail shorts got greedy and trapped, leading to a short squeeze (D-E) = Bear Trap.
3. This attractive price action pulled in more shares from perm-a-bulls as they marched to the beat of dreamed up fundamental reasons for this move.

What will happen next? Well, this is a painful possibility:

4. Once AMRN tops out, converted shareholders (Big Money) will dump their long shares, forcing a pps fall out (F) = Bull Trap. Retail bulls get burned by a triple top reversal and suffer another wave of pain (by holding this stock position) as they watch recent gains evaporate.
5. Losses magnify when retail investors finally figure out they’ve been duped, there is no news, and the stock market bears have begun to shoot down anything and everything in every sector that has been green the past 6 months. Miraculously, however, the investors (Big Money) - who Amarin management is beholden to – will have not only been spared the carnage, but have been the beneficiaries both on the short and long side of unwinding profitably.
6. Capitulation ensues (G) and these same prior converted shareholders begin to bottom fish near $2.00/share price, just in time for the 2nd Interim look. Once again a profitable setup for them to make huge profits (at retail investor’s expense) will have been dished up.
This is why I trade this stock…