- Palantir shares look to break sharply higher.
- PLTR has been rallying from a low base.
- The company has been continually signing new contracts.
Palantir Technologies was one of the darlings of the first retail revolution back in January when the Reddit community pushed the PLTR stock price from $26 to $45 in a matter of days. Since then the stock has languished and slid back to a low of $17.06 in May. From here things have started to pick up nicely and quietly for the software firm. Earnings on May 11 were solid if unspectacular with EPS in line, while revenue was $10 million ahead of analyst estimates.
Palantir also announced a few days later that it had a new contract worth $32.5 million with the US Space Force and Air Force. The US CDC (Centre for Disease Control) has also recently announced a renewal of its partnership with Palantir. The earnings release had seen the shares take a brief spike lower to bottom out at $17.06 as mentioned, but since then it has been all one-way bull traffic.
Should I buy PLTR now?
Wait for confirmation. That is the quick answer in this author's opinion. Some key levels are approaching, and some interesting potential makes a PLTR forecast dependant on a few key levels. First, PLTR has run into huge resistance at $24.70. This is the point of control since Palantir's IPO. The point of control is the price at which there has been the highest volume over the period in question. In this case, since IPO, it is the fairest price or the price that buyers and sellers transacted at the most. In effect, it is an equilibrium, so it will be a strong resistance to break. However, buying a break of this level is where things could get interesting.
The volume profile on the left of the chart shows the lack of volume above this key $24.70 level. The volume totally thins out above $25.40, and this could be a good entry point for a breakout as it will confirm the break of $24.70 and the 100-day moving average. Once above $30, there is a vacuum of volume that could accelerate any price moves. The issue is a pullback is quite likely on the first test of any resistance. Before $24.70 goes, PLTR shares could retrace toward the 21-day and 50-day moving average convergence as a support at $22.90. $20.97 is also a strong support. Realistically a break of $20.97 is too much and ends the bullish setup.
The Moving Average Convergence Divergence (MACD) indicator has also been trending lower since December 2020. Look to this for a confirmation of the breakout setup. No technical indicator is perfect, but the more that align, the more risk is in your favour. Trading is not about being right all the time. It is about managing the probabilities and putting the risk-reward profile in your favour. That is how profit is consistently made.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.