Baba,

Unfortunately you are incorrect in stating the liquidity of the warrants would increase in proportion to the share price, in fact it is an inverse correlation between both factors. As the share price increases, and the warrants are more in the money, the liquidity of the warrants degrades due to there being little reason to purchase the warrents since they will simply track the share price with a minor time value reflection. Other than that your strategy is one I would be a proponent of.