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OK, I admit it, it's a stupid title. In reality, probably not a good idea to have a rattlesnake as a pet, because you can't tame a rattlesnake. You never know when your gonna get bit. If you stay away, your safe, but when you get in close, watch out.

However, rattlesnakes might be dangerous, but they are tasty. I recall when I was a young... I was working on a construction site with a friend of mine and we were surprised by a rather large rattler. We had heard they are good to eat, so we chopped off his head and took it home for dinner. Amazingly, when I dumped him into the sink, the snake, with no head, coiled and struck into the side of the sink. It was at that point that we decided it was time for a beer, and we should wait until the snake calms down a bit.

What's this article about?

Be careful when handling rattlesnakes. I had heard it's worse to be bitten by young rattlers than old, because the young ones tend to bite and just release all their venom, whereas the older ones will bite and release. Arena (NASDAQ:ARNA) still does not have earnings to report. So let's consider it still on the young side of the maturity line.

I was speaking with another Arena investor this morning as I watched the morning rally. She said, "I think it will continue up from here."

I said "I don't know."

The pattern told me it was a short covering move. One or more shorts might have decided things were getting dicey and wanted to move on to better pastures?

Could also have been an institutional that decided to come in?

The pattern looked like a short cover to me. I only say that from years of staring at trading patterns. It's hard to know for sure.

For the record, I started trading back in 1999, though I've been interested in stocks since around the early 1970s. I went to my first investor meeting on the Queen Mary when I was around 13 or 14 years old (I went with my mom).

Today's Action (June 21, 2013):

It was a pop and fade, and then a rise in the afternoon, the move above $8 may have kicked in some triggered buys and that may have inspired some more short covering or long buys, maybe a little profit taking after that. It's really all a mix because every sell or buy needs someone on the other side.

But as I said, I don't know, so what's my point and why did I write this piece?

I read the Spencer Osborne article "Arena Surges On Script Data," and thought that maybe the twitter report on that data "could" have inspired the initial move by getting someone nervous. I personally don't find single data points inspiring. I thought I would just reiterate what he indicated though. Be careful. If your trying to day trade this I would warn that there is a lot of short-term unpredictability.

From bear attacks to general upward pressure for the long buy in - it's like an old west gun battle, who's going to draw their weapon first? Who's going to pull the trigger on an institutional buy in, a short cover, and day traders are in there as well- maybe they're like the young folks at the saloon; they are feisty, and full of energy. You never know when they are going to dance a jig, or pick a fight.

As investors we seem to ponder the entry points and indications based on the technicals we track, and our senses based on our experience. Larger investors, short or long, may then enter those criteria into trade triggers.

Whatever the reality is I have to agree with Spencer. This stock does not have a solid data trend. Accuracy on prescriptions is also a question. As Craig Audet said at the Wells Fargo meeting, "as accurate as IMS is, the data for Belviq will be."

That sort of translates to GIGO: It's "garbage in/garbage out," or it's "good in/good out."

I think there is certainly potential for more ups and downs until the trend becomes better established based on increasingly reliable data.

Caution is warranted in the short term, but if you are long on GPCR technology this volatility should not be so much of a consideration.

Will Arena go up or down from here?

As I said, I don't know. In my mind it's still a rattlesnake, and your choices need to be based on your risk tolerance.

What I see is that bear attacks are possible and there seems to be a lot of upside pressure, almost like a pressure cooker. Belviq has been cooking for quite some time and in some senses you can stick a fork in it and see that it's done (FDA approved, DEA label, it's hitting the stores now). The meal is being served. Now we're just waiting to see how many customers come to the table.

Oh, and by the way, that rattlesnake was darn tasty.

Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Arena: Taming The Rattlesnake