Palantir’s stock is stuck at $27.49, a previously indicated resistance level.
In Tuesday’s session, PLTR forms a bearish engulfing candle.
The big data corporation is still gaining new customers on a daily basis, but the rise is losing momentum.
The Centers for Disease Control and Prevention (CDC) recently announced that its cooperation with Palantir in disease surveillance and outbreak control has been renewed. This follows Palantir’s recent selection by the Federal Aviation Administration (FAA). Last week, DataRobot announced a partnership to develop distinctive, agile, and real-time solutions to assist tackle the most pressing demand forecasting issues. Palantir experienced a high volume day on Friday as the company was added to the Russell 3000 Index with an effective date of Monday, June 28. There is never a dull moment in these parts.
Palantir stock is on track to close the gap left by the company’s prior results report in February. The stock dropped from $32 to $30 in a single day, kicking off a powerful downturn that would take it to $17 by May. Ironically, one of the reasons for stopping this downturn appears to have been the revelation of the next findings, with PLTR establishing firm support and launching a significant upswing.
However, when resistance at $27.49 bites, the trend may be ready for a reversal.
Statistics from Palantir (PLTR).
$50 billion in market capitalization
Price/Earnings
Price/Sales: 153, Price/Book: 45, and Enterprise Value: $40 billion
Net Margin: 70% Gross Margin: 70% Gross Margin: 70% Gross Margin: 70% Gross Margin
$22.43 average Wall Street rating and price target
As PLTR has hit our $27.49 barrier, the recent strong trend from the lows of $17 in the middle of May has stalled. That is, however, why we seek out resistances in the first place. Those who missed the move may be in line for a buy-the-dip chance, provided it is simply a dip. It was always going to be a tough nut to crack, especially on the first try, because $27.49 is the high from March 15 and a zone with a good amount of volume. The fact that the Nasdaq is in overbought RSI area contributes to the sluggishness.
A long red bearish engulfing candle appears on Tuesday, which isn’t promising. At $26.18, the 9-day moving average is still below the current level. The 21-day moving average is at $25.09, while the point of control is at $25.02. This $25-26 range is a potential support level and a rebuy zone for traders in the event of a correction. Personally, I’d wait till the price is closer to $25, or perhaps $23, because this area has a lot of volume and should operate as support. A break of $23 would convince me to abandon my dip-buying plan. Keep an eye on the Nasdaq and the Relative Strength Index (RSI) to see if it recovers. Palantir’s RSI is slightly below the overbought zone, but it is still quite high, which raises the danger of taking new long positions.
Every trader is unique and should develop a strategy that works for them, but risk management is paramount. Again, this is my own opinion, but I would not attempt to adopt a new stance here. For new positions, I’d aim for a drop entry level around $23-$25, with a stop below $23. Breaking $27.49, on the other hand, should definitely set up a move to close the $30-32 gap. Going long a break or, better still, a $30 call option for July 9 could be intriguing. Purchasing choices always reduces risk. If PLTR seeks to close the gap, volatility and price will rise, resulting in a double whammy for option valuation.
The July 9th $30 call strike is now selling at $0.12. If you want the extra week, July 16 is $0.26.
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