Viking Therapeutics, Inc.

$VKTX

I generally stay away from these biotech plays due to their high volatility and the specialization needed to truly understand the value they’re creating. However, I can craft a risk/reward setup here that’s attractive, and I’ve further mitigated risk by approaching the trade with a lighter allocation than I might with a normal position.

VKTX 0.00%↑ bounced off its 200 day yesterday in a tough tape, and is at the lower end of a range between that 200 day and the AVWAP from the February gap up. For me, the levels set up like this -

Downside levels - 200 day $48 (9% risk); Complete fill of gap range (26% risk)

Upside levels - AVWAP from Feb Gap up $70 (31%); Prior highs $95 (78%)