- Palantir shares rise further on Monday to keep the bullish trend firmly in place.
- PLTR hits resistance at $27.49 as RSI goes overbought.
- PLTR still reeling in the customer wins as stock bounces from May lows.
Palantir shares continue to trend steadily higher from the May lows in a solid steady and at times spectacular uptrend. The shares bottomed out in May at $17 and have now risen to over $27 in the space of a little over a month. Pretty nice return on your investment if you caught the bottom in May. The new customer wins are certainly part of the reason for the rally. The Centre for Disease Control (CDC) recently announced it has renewed its partnership with Palantir in relation to disease monitoring and outbreak control. This adds to another recent win with the Federal Aviation Authority (FAA) selecting Palantir. Thursday saw the announcement of an agreement with DataRobot designed to create unique, agile and real-time solutions to help solve the most pressing demand forecasting problems. Friday was a big volume day in PLTR stock, but this was due to it entering the Russell 3000 Index as funds are benchmarked on their performance from the open on Monday, so most would have been buying in Friday’s closing auction.
Palantir stock remains on course to fill the gap left from the previous earnings release back in February. The stock gapped down from $32 to $30 and set in motion a strong downtrend to $17 by May. Ironically, the release of the next results appears to have been one of the catalysts ending this downtrend, with PLTR finding strong support and beginning a powerful uptrend.
Palantir (PLTR) statistics
| Market Cap | $51.4 billion |
| Price/Earnings | 153 |
| Price/Sales | 44 |
| Price/Book | 31 |
| Enterprise Value | $40 billion |
| Gross Margin | 70% |
| Net Margin | |
| Average Wall Street Rating and Price Target | Hold, $23 |
The trend continues with the 9-day moving average working perfectly since Palantir shares crossed above it in the middle of May. Since then it has been one way traffic, and any dips to the 9-day moving average have been taken up by traders. Breaking the wedge formation in late May added to the bullish impetus surrounding the stock. More important though was PLTR stock getting back above the point of control at $24.70 since its stock market launch. The point of control is a volume-based metric to show the price with the highest concentration of volume during a given time period. It is basically the fairest price or point of equilibrium. Once above this price, the volume resistance in PLTR has been getting lighter and lighter, and a break above the next resistance level at $27.49 sees volume thin out even more. $30 is the big target though, as there is a gap from $30 to $32 that Palantir left from its earnings release on February 16. Markets love to fill a gap, and with volume here being eliminated, resistance is weak. A move to $32 should not be of too much difficulty.
Risk reward then skewed firmly to further gains with the 9-day moving average holding the short-term trend in place at $26.07. A break of this is not too disastrous though, and the big support will come at $24.70, the point of control and also close to the 21-day moving averge at $24.93. This is a strong support zone with a lot of volume. A buy-the-dip strategy might work if PLTR gets back. As always, use stops to control risk or buy call options as these have built-in loss protection.
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