Amarin Corp Plc (AMRN)

[FlyFishingStocks]

Anatomy of a Price Squeeze

The bottoming process (following a gap down fall out (May plunge) nearly always involves the development of a price squeeze before shorts cover and prices breakout sharply above the 3+ month price range and the "bottom is in".

This chart clearly shows this setup:


We see a quadruple divergence between price and momentum. Each low that is probed is done so on a higher momentum low (tremor) while prices continues to decline towards the point of breakout.

Notice the Bollinger Bands wrapping prices tighter and tighter. This is tantamount to an extreme buildup of pressure prior to a volcanic eruption.

Volume rises sharply upon resolution and what little overhead resistance gets blown out until the 200MA is reached (2.05).

Also a chain reaction of positive TA propagating events is ignited:
1. Signal line crosses the o lne
2. the 20MA crosses above the 50MA (golden cross)
3. Bollinger bands expand and turn up
4 May gap fills.
5. Analyst upgrades

All of these occurrences trigger short seller stops and accompanying automated buy programs. The combined rush of accumulation, further squeezes remaining shorts and attracts increased buying. If events accelerate through #3, it is usually sufficient to lift prices to the gap fill mark at 2.64.

This analysis is IMO. Throw stones, call me crazy, call me a clown....don't care, because I enjoy making money :)