Low-priced Viking Therapeutics (VKTX) has been under accumulation (read "buying" if you are just learning about technical analysis). This biotech firm has been working to develop therapies for metabolic and endocrine disorders according to company releases. This is one of those biotech plays that can soar if a product comes to market or could crash and burn if the trials do not show promise. That being said, let's see what the charts and indicator look like.
In this daily bar chart of VKTX, below, we can see a "line pattern" from February to September. Prices are in a very tight range and volume is very light. Interest and volume in the stock picked up in September and continues to build. Prices are above the rising 50-day moving average line and the rising 200-day average line. In October you can see a bullish golden cross as the 50-day line crosses above the slower-to-react 200-day line. Now look at the On-Balance-Volume (OBV) line, which has been rising since August and tells us that buyers of VKTX have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in September for an outright go long signal. A fresh buy signal looks like it is being generated now.
In this weekly bar chart, below, we can see the long sideways base pattern or line pattern going back to early 2016. The slope of the 40-week moving average is bullish. The weekly OBV line started to turn up in late 2016 and it turned up even stronger in September of last year. The weekly MACD oscillator is bullish.
In this Point and Figure chart, below, we can see a potential longer-term price target of $11.25.
Bottom line: VKTX has already made a big rally in the past five months so new longs need to go slowly. A period of sideways trading between $4.00 and $6.50 is likely and aggressive traders could look to buy weakness to the $4.50 area risking a close below $3.50. My longer-term price target is $11.