This Will Act as the Trigger for the Next Big Move in VKTX Stock

Viking-Therapeutics-Stock
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Anticipating Much Higher VKTX Stock Prices

Biotechnology stocks are not for the faint of heart, the reason being that stocks in this sector have a tendency to experience wild moves.

So much hangs in the balance on whether a new drug or treatment is approved by the U.S. Food & Drug Administration (FDA). On any given day, there is a biotechnology stock making headlines because it is either up big on the day following good news, or down big following bad news.

These wild swings are why I would have to say that biotechnology stocks are best suited for aggressive investors who fully understand the risk-reward trade-off that this sector can offer.

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Today I have chosen to focus on Viking Therapeutics Inc (NASDAQ:VKTX), because I believe that this biotechnology stock is setting up to make a substantial move toward higher prices. My beliefs are based on a number of technical indications that have come together in perfect alignment, suggesting that a powerful move is in the making.

At this moment, I am watching the development of a particular price pattern on the VKTX stock chart because I believe it will act as a trigger initiating the next big move.

The technical price pattern I am watching is highlighted on the following Viking Therapeutics stock chart.

Chart courtesy of StockCharts.com

The technical price pattern highlighted on the above chart is an ascending triangle.

Ascending triangle price patterns are created when the price action is characterized by a constant high and a sequence of higher lows

When you connect the respective peaks and troughs created by the price action, it produces two converging trend lines that depict a pattern resembling a triangle.

The upper trend line identifies where price resistance resides. The lower trend line identifies where price support resides.

These trend lines are important because this pattern will be resolved when the stock price either breaks above price resistance or breaks below price support. Once this event unfolds, the Viking Therapeutics stock price is expected to continue moving in that direction.

I am awaiting a resolution of this pattern because I believe it will determine whether a substantial move toward higher VKTX stock prices is likely to follow.

The reason I have such high expectations of things to come is that this pattern is developing after a significant event that occurred on May 31. That event caused the stock to close higher by an awe-inspiring 101% on the day.

The catalyst that caused the stock to double in a single day was a news release announcing that there was evidence showing that targeting a thyroid hormone receptor beta agonist may be a viable therapeutic pathway for non-alcoholic Steatohepatitis.

This one-day doubling of the Viking Therapeutics stock price caused the stock to break above a longstanding all-time high.

That development is captured on the following stock chart.

Chart courtesy of StockCharts.com

This stock chart illustrates that the longstanding all-time closing high was at $9.49. This level was established in May 2015, which was a couple of weeks after the stock first began trading on a public exchange.

On May 31, 2018, when the Viking Therapeutics share price doubled, it broke above its longstanding high. This was, and remains, a very significant event.

Breaking above a longstanding high removes the last level of price resistance that could contain the stock price from advancing.

Without a level of resistance to contain a stock price, the sky becomes the limit, creating the perfect environment for an accelerated move toward higher prices.

Breaking above a longstanding high that was created shortly after inception is a characteristic that is shared among some of the most noteworthy and best-performing stocks.

For example, Shopify Inc (NYSE:SHOP) and Facebook, Inc. (NASDAQ:FB) are popular stocks that shared this exact characteristic. Once these stocks broke above their longstanding highs, they went on to make epic moves toward higher stock prices—moves that are still in development now.

VKTX stock appears to be sitting in a similar position, and bullish resolution of the ascending triangle will confirm my suspicions that an accelerated move toward higher prices is on the horizon.

Analyst Take

I believe that Viking Therapeutics stock is on the cusp of an accelerated move toward higher prices.

This move will likely begin when the stock sustains a close above resistance, which resides at $13.50, opening the door to much higher prices.