VKTX Day-2 Post-Crash Play: Fade the P-Bounce Into 26s

Summary view

• Setup: Day-2 after a catastrophic gap-down (Aug 19 low 23.21, close 24.36 on 64.6M shares). Aug 20 printed a relief-bounce session to 26.74 before fading to 25.69 on 23.6M shares, closing modestly below intraday VWAP (~25.95). Structure resembles a classic P-shaped short-covering day that often precedes a fade/inside-to-down day.
• Bias (next 24h): Slightly bearish with high volatility. Expect an early attempt to probe 26.2–26.8 that likely meets supply, followed by a drift lower toward 25.0–24.8. Tail risks: retest 24.4–23.8 (bear) vs. squeeze toward 27.5–28.0 (bull) if 26.8 breaks.

Price action and structure

• Regime shift: Prior to Aug 19, VKTX trended in the low-40s with tight ranges. The gap-down to the mid-20s on extreme volume marks a regime change. Prices now trade far below all commonly-watched moving averages, so every rally into the mid- to high-20s invites supply from trapped longs.
• Day-2 behavior: Today’s session drove from 24.55 to 26.74 early, then balanced and faded into the close (25.69). That distribution is consistent with short-covering, not broad-based initiative buying. Closing under VWAP is a subtle negative.
• Support/resistance map (near-term):
  • Supports: 25.50–25.60 intraday shelf; 24.57 (daily S1 calc); 24.36 (Aug 19 close); 23.21 (Aug 19 low).
  • Resistances: 26.23–26.26 intraday pivot; 26.74 (Aug 20 high); 26.78 (R1); 27.86 (R2); psychological 28.00; 28.35 (23.6% Fib from 41.27→23.21).

Key levels via classic daily pivots (using H=26.74, L=24.53, C=25.69)

• Pivot P = (H+L+C)/3 ≈ 25.65
• R1 ≈ 26.78; S1 ≈ 24.57
• R2 ≈ 27.86; S2 ≈ 23.44
• R3 ≈ 28.99; S3 ≈ 22.36 Observation: Price failed just shy of R1 today; S1 ~24.57 coincides with premarket lows. Expect tomorrow’s ping-pong between P and S1 unless fresh news.

Volume and order flow

• Aug 19: 64.6M shares = capitulation-scale distribution. Often forms a tradable low or at least a multi-day base, but not necessarily a V-bottom.
• Aug 20: 23.6M shares with a P-shaped intraday profile and close below VWAP (~25.95) suggests buyers were not dominant into the bell.
• OBV/Volume delta: OBV collapsed on the gap-down, minor uptick today. Supply overhead likely remains heavy until 27.5–28.5 is accepted.

Trend and moving averages

• Fast MAs (5/8/10-day EMA): All curled sharply down and lie well above price (approx low-30s to high-20s pre-gap), confirming a bearish trend regime. Price is below 20D and 50D SMA by a wide margin.
• 10D SMA rough estimate ≈ 36.5 (distorted by pre-gap closes). Price at 25.69 is deeply sub-trend, which normally supports mean-reversion bounces—yet the magnitude of the gap-down tempers bounce prospects within 24h.

Momentum oscillators

• RSI(14) daily: Likely high-20s to low-30s after today’s bounce—still oversold but stabilizing. Oversold can remain oversold in gap-down biotechs; bounces tend to be sold until a base forms.
• Stochastic (daily): Near oversold with a potential early bull cross; often yields a 1–2 day pop into resistance before rolling if the primary trend is down.
• MACD (daily): Fast line deeply below signal with a fat negative histogram; early deceleration intraday but no daily bullish cross. Momentum remains negative.
• MFI (daily): Likely <30 given price damage and heavy sell volume; small rebound today not enough to reverse money flow profile.

Volatility and ranges

• True Range explosion: TR on Aug 19 ≈ 18.9; today ≈ 2.38; ATR(3) rough ≈ 7.7—elevated regime. Expect wide intraday swings and slippage risk.
• Bollinger Bands (20,2): Yesterday closed outside the lower band; today re-entered and tagged lower-half of the envelope. Typical sequence is overshoot → re-entry → 1–3 sessions of consolidation beneath the mid-band; mean-reversion to the 20D mid-band (~low/mid-30s) is unlikely in the next 24h without a catalyst.
• Keltner Channels: Price remains at/below the lower KC; first touch back inside often fades if trend is strong.

Market profile/structure

• P-shaped day suggests short covering rather than new longs. If next session opens below/near the pivot (25.6–25.8), the edge favors a fade of early rips toward 26.2–26.8 back into 25.0–24.8 balance.

Ichimoku (daily)

• Price far below cloud; Tenkan/Kijun likely clustered in the low/mid-30s. Bearish alignment across components; lagging span buried beneath price and cloud. Any rallies into 27–29 are against the cloud trend.

ADX/DI

• ADX likely rising, DI- dominant post-crash—sign of a strong downtrend. Pullbacks (up) are opportunities to sell until ADX rolls over or DI+ crosses up convincingly.

Fibonacci anatomy (anchor 41.27 high on Aug 13 to 23.21 low on Aug 19)

• 23.6% ≈ 28.35; 38.2% ≈ 30.83; 50% ≈ 32.24; 61.8% ≈ 33.65.
• Current price lies below the first retracement. Within 24h, a stretch to 28.35 requires persistent buying through 26.8 and 27.9—possible but lower-probability without news.

Candles/patterns

• Aug 19: Long bearish marubozu-type body with gap and extreme range—capitulation signature.
• Aug 20: Smaller green real body inside prior day’s body—bullish harami-like pause, often a continuation pause unless confirmed by a strong follow-through day. Long upper shadow relative to body reflects supply near 26.7.

Intraday VWAP and micro-structure

• Session VWAP ≈ 25.95. Close 25.69 sits modestly below VWAP, hinting at seller control into the close.
• Micro supports at 25.55–25.60 and 24.9–25.1; micro resistance 26.20–26.30 then 26.70–26.80.

Risk context and catalysts

• Biotech headline risk remains elevated; implied volatility likely high with skewed puts. Absent new data, technicals dominate: overhead supply and fresh trapped inventory from 27–42 reduce the odds of a clean V-bottom in 24h.

Scenarios (next 24h)

• Base case (60%): Early push toward 26.2–26.8 fails below R1 (26.78), followed by a fade into 25.0–24.8 by the close.
• Bear extension (25%): Loss of 24.57 (S1) opens a test of 24.36; a break there targets 23.8–23.4 (S2). Would require risk-off tape or renewed selling pressure.
• Bull surprise (15%): Strong bid clears 26.78 and holds above 26.8 on volume; squeeze to 27.9 (R2) with stretch risk to ~28.3 (Fib 23.6%). Likely needs a news catalyst or broad market tailwind.

Trade thesis and plan (tactical, 24h)

• Edge: Fade the Day-2 P-shaped bounce into known resistance with tight risk.
• Entry: Short into 26.3–26.5 (limit preferred; first touch of that zone has confluence of intraday supply and R1 just overhead).
• Stop (discipline, not an order in the prompt fields): Above 27.2 (clearance over R1 and above today’s distribution high reduces edge). Risk ≈ 0.7–0.9.
• Target: 24.8 (above S1/S prior close cluster; captures the likely reversion zone). Reward ≈ 1.5–1.7. R:R roughly 1.8–2.2.
• Invalidations: Strong open above 26.8 that holds VWAP on pullbacks, or a high-volume reclaim of 27.0 that builds value above 27.2—stand aside or reassess.

Bottom line

• The broader tape is bearish post-gap; today’s action looks like short covering, not accumulation. Into the next 24 hours, probability-weighted path favors fading strength under 26.8 and targeting a move back toward 25.0–24.8. High volatility persists; size down accordingly.

Note: This is a short-term technical view, not fundamental advice. Biotech headlines can instantly invalidate technicals; use hard stops and risk limits.