Viking Therapeutics Inc. (NASDAQ:VKTX) is nearing a pivotal moment as its stock hovers just above a potential death cross.

This ominous technical pattern, where the 50-day moving average moves below the 200-day moving average, is often seen as a bearish signal. While not confirmed yet, the trajectory suggests growing pressure on the stock, which has struggled in recent months despite earlier rallies.

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VKTX Stock: From Rally To Retreat

VKTX stock surged earlier this year, buoyed by optimism surrounding its weight-loss drug program. However, the exuberance has faded, with shares plummeting 25.69% over the past month and 14.57% over six months.

Trading at $54.51, the stock remains below its 20-day and 50-day simple moving averages ($58.72 and $63.04, respectively), signaling a bearish trend.

Meanwhile, Viking's 200-day simple moving average sits at $62.73, creating a narrow gap that brings the death cross closer. This technical weakness is further underscored by the Moving Average Convergence Divergence (MACD) indicator at a negative 3.68, and a Relative Strength Index (RSI) of 42.11, hinting at a market losing its bullish momentum.

Weighty Challenges

Analysts have raised concerns about Viking's ability to compete in the highly lucrative obesity drug market, dominated by heavyweights like Eli Lilly and Co (NYSE:LLY) and Novo Nordisk AS (NYSE:NVO).

While Viking's weight-loss drug candidates have shown promise, scaling production for both oral and injectable versions could be costly and time-consuming, limiting short-term prospects.

Outlook: A Technical Test

The looming death cross reflects broader headwinds for Viking, as investor confidence wanes amid sector-wide challenges. However, the stock could regain its footing if Viking unveils favorable clinical updates or strategic progress in its weight-loss pipeline.

All eyes are on the charts now as VKTX teeters on the edge of a critical technical breakdown.

Will it find support or confirm the dreaded death cross? Investors are watching closely.

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