Viking Therapeutics, Inc. (VKTX) shares rose more than 4% on Thursday after analysts defended the company against a bearish report from Citron Research. Earlier this week, Citron published a negative report on licensor Ligand Pharmaceuticals Incorporated (LGND), saying that Viking Therapeutics accounts for over half of Ligand's milestones. Despite the significant portion of its valuation attributable to Viking, Ligand has been repurchasing its own stock and selling its Viking Therapeutics holdings. Citron also pointed out that Viking Therapeutics insiders have been net sellers over the past year.
Raymond James analysts called the report "ridiculous" and maintained its Outperform rating and price target of $43.00 per share on Viking Therapeutics, which represents a massive premium to the current market price. At the same time, STAT's Adam Feuerstein tweeted that Citron's short thesis relies on Viking "blowing up," adding that if Viking pans out, short sellers would be "toast."
From a technical standpoint, the stock is trading down more than 65% from its 52-week highs made back in mid-September. The stock bottomed out at its then-S2 support level in mid-December before rebounding to a pivot point near $8.76. The relative strength index (RSI) remains somewhat oversold at 45.74, while the moving average convergence divergence (MACD) remains in a bullish uptrend. These indicators suggest that the stock could have more room to run higher.
Traders should watch for a breakout toward upper trendline and 200-day moving average resistance near $10.00. If the stock breaks out from these levels, traders could see a move higher toward R2 resistance at $13.45 over the coming weeks. If the stock breaks down from trendline support, traders could see a move to fresh lows near S1 support at $5.86. Traders will be keeping an eye on VK2809 and other clinical programs as well as potential acquisition possibilities.
The author holds no position in the stock(s) mentioned except through passively managed index funds.