Here’s your trade on Viking Therapeutics ($VKTX) – October 25, 2024
Dan Fitzpatrick here at StockMarketMentor.com. One of our trades is Viking Therapeutics ( NASDAQ: VKTX ).
This got a lot of play the other day, I think it was Wednesday after hours, but it could have been Thursday morning. It doesn’t matter to me because I only trade when the markets open. The company basically had a breakthrough in their obesity product, that kind of screwed Eli Lily ( NYSE: LLY ) a little bit, let’s just say, out of the lead spot.
The stock really ran hard on this day. And the way this volume was, you just knew that this is massive institutional buying here. It’s huge institutional buying here. Listen to me, when you see this kind of a long consolidation, the stock tightening up, and then it explodes out of this consolidation on news, on massive multiples of average volume, this has to be institutional buying.
The reason I’m emphasizing that is, because institutions don’t just buy in one day, they’re just not going to do that. They jump the stock up infinity. There’s been quiet accumulation here, that’s what makes a base. But when they decide to buy, they’re going to take a bunch of it here because they’re all bidding against each other. But they’re going to continue their buying campaigns into the future.
That’s why this is really not surprising that the stock is up another 7.2 percent. And so what I think you’ve got to do is, you’ve got to be paying attention to this pattern here. I haven’t seen stocks do this, pay attention to this one, I haven’t seen stocks go up like this, and then, wham, drop down a lot. I’ve seen them pull back a little bit here, but then ultimately move higher.
We could see this stock just continue to go for a bit and not really pull back until much higher, let’s say maybe even 85.00 or something like that. Because again, this has a lot of institutional buyers and they’re not just going to buy forever. So at some point, this momentum is going to wane, The stock will pull back and give you an opportunity to get in if you missed this, or if you’re just looking for an opportunity to buy more.
You would buy more, not when the stock pulls back, knuckleheads do that. You want to buy more when the stock pulls back. And then shows you that it’s done pulling back. If you’re not waiting for this part, instead you’re just buying this, well then, what you’re doing is, you’re trading on the, well, is gone down far enough trading strategy. That doesn’t work.
If the stock does pull back, you want to wait for the pullback to run its course, and boom, then grab it on the first up day. But for the time being, I think you’ve got to take these puppies out, and watch and see how high this thing can go.
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