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Weekly Three Extreme Trades / Extreme Trades for the Week of November 12, 2018

Extreme Trades for the Week of November 12, 2018

November 12, 2018

Trade No. 1 — Viking Therapeutics Inc. (NASDAQ:VKTX)

VKTX isa clinical-stage biopharmaceutical company that focuses on the development of novel therapies for metabolic and endocrine disorders. Its lead clinical program, VK5211, is an orally available, non-steroidal selective androgen receptor modulator in Phase II development for the treatment of patients recovering from non-elective hip fracture surgery; in Phase I clinical trials for improving lean body mass; and in pre-clinical trial for improving bone mineral density, bone mineral content, bone strength, and other measures. The company is also developing VK2809, an orally available, tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta, which is in a Phase II clinical trial for the treatment of patients with hypercholesterolemia and fatty liver disease; and in a Phase I clinical trial to treat patients who suffer from glycogen storage disease type Ia. In addition, it is developing VK0214 for X-linked adrenoleukodystrophy, which is in pre-clinical stage.

After pulling back from a high of $24, Viking has been consolidating just above $12 a share.  It’s just now beginning to attract further interest after the company updated data for its non-alcoholic steatohepatitis (NASH) drug candidate, VK2809, at the annual meeting of the American Association for the Study of Liver Diseases.

While many of the results were already known from September 2018, the company did unveil new analysis that showed that 67% of VK2809-treated patients exhibited a 50% reduction in liver fat content at the 12-week mark.  The company also noted there were no serious adverse effects observed in patients. Should things move along well from here, the treatment could become a contended in the treatment of NASH.  If it can continue to prove itself against industry giants like Intercept Pharmaceuticals, it’s a bargain at current prices.

Action to take: VKTX is a buy at market prices.

Trade No. 2 — Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson (JNJ) is technically overbought at double top resistance.  It’s also challenging its upper Bollinger Band (2,20) with overbought over-extensions on RSI, MACD and Williams’ %R.  Typically, when it gets this overbought, we see a reversal.  From here, we believe JNJ could pull back to at least $135.

Action to take: Buy to open JNJ December 21, 2018 145 put at market prices.

Trade No. 3 – Bristol Myers Squibb (NYSE:BMY)

BMY isn’t looking so hot either, at least technically.

After partially refilling its October 2018 bearish gap, the stock is beginning to break down again. We believe it could pull back to at least $48 a share near-term.

Action to take: Buy to open BMY December 21, 2018 52.50 put at market.

Stay tuned for more ideas shortly.   Even in a volatile market, there are still plenty of opportunities.