This Week in Episodic Pivots: September 10, 2023

We have another new position for this week

Alright guys, slow week as expected. Not much happened in the markets. We did however get stopped out of Infinera ( INFN 0.00%↑ ). We were in and out in a couple weeks for a slight 2% profit. Not bad, but not what we hope for. The company failed to maintain its momentum after the prior Friday’s close.

Part of the strategy is to protect our downside with tight stops. We used the 50-day moving average in this position. And the close and subsequent open below it, triggered the sell signal. Don’t fight this, sell and move on.

This week should tell us a lot about what’ll happen for the rest of the year. The big money traders will all be back from the Hamptons, or wherever they vacation now. And they will be ready to make their moves for the remainder of the year.

I really have no feel for which way the market is going to go. I wouldn’t start trading the indexes right now. We are not seeing the soft pitch to knock out of the park at these levels.

The one thing I am watching this week is the strength of the Dollar Index. The DXY has gone almost straight up since bottoming two months ago to the day. Often when the dollar zigs, the market zags. And this strength is likely why the market can’t get a sustainable rally going right now.

But if we were to see the dollar reverse lower, odds are we’d see a sustainable rally form in the market. And it could go higher. So that’s the bull case for now. We’ll see if that plays out.

But we should continue holding our positions. We are riding a lot of strong stocks higher. And we’ll have a couple more to add this week.

We have a light news week ahead of us. Only the CPI print Wednesday morning will have any impact on the markets… At least form a macro perspective.

So let’s try to make a little money by buying some strength.

Viking Therapeutics ( VKTX 0.00%↑ )

This biopharma company focuses on therapies for patients suffering from metabolic and endocrine disorders. The big news that jumpstarted them last week came from the metabolic side of the business.

Viking just initiated Phase II trials of its fat drug called VK2735. In the Phase I trials this drug was well tolerated by patients with no severe adverse side effects. And it caused a statistically significant amount of weight loss.

Patients who took the drug showed a decrease in glucose, reduced appetite, lower body weight, and increased insulin sensitivity in patients with type 2 diabetes, obesity, or both.

They are hoping to catch onto the trend of weight loss drugs like Ozempic and Wegovy. The parent companies of those drugmakers have soared this year. And Viking is a lot smaller… So the upside for this company is a lot higher if they can gather a share of the market.

And this chart is picture perfect. After a large run right, Viking pulled back to the 200-day moving average. Then it surged higher off this support level on Friday. This is our entry.

And we’ll have a tight stop, using the 200-day MA as our initial stop loss.

And that’s all for this week.

Happy Investing!