Palantir Technologies Stock Price and Forecast: $27.49 proves the perfect resistance so far for PLTR

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. Last week 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 heavy volume day in Palantir due to the fact that Palantir was added to the Russell 3000 Index and the effective date was Monday, June 28. It is never dull around these parts.

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. 

But the trend may be set for a dip as resistance at $27.49 bites. 

Palantir (PLTR) statistics

Palantir (PLTR) stock forecast

The recent strong trend from the lows of $17 in the middle of May has slowed as PLTR has run into our $27.49 resistance. But that is why we identify resistances in the first place. Those who have missed the move may be about to get a buy-the-dip opportunity, so long as it is only a dip. $27.49 is the high from March 15 and a zone with a reasonable amount of volume, meaning it was always going to be a tough nut to crack, especially on the first try. When you look at the broader picture of equity markets and see the Nasdaq in overbought RSI territory, it further adds to the sluggishness.

Tuesday brings a long red bearish engulfing candle, not so good. The 9-day moving average is still below the current level at $26.18. The 21-day at $25.09 is also close by, and the point of control is at $25.02. This $25-26 zone is a potential support and an area where traders me rebuy in a correction. Personally, I would wait until closer to $25 and even down to $23 as this area contains a lot of volume and should act as support. A break of $23 and I would give up on a dip-buying strategy. Watch the Nasdaq and its Relative Strength Index (RSI) and see if it comes back. The RSI for Palantir shares is just below the overbought zone, but it is pretty elevated and thus heightens the risk of taking fresh long positions. 

Every trader is different and should pick a strategy that suits themselves, but risk management is of number one importance. Again my own view, but I would not look to take a fresh position here. For new positions, I would be looking to get a dip entry level somewhere around the $23-$25 zone with a stop below $23. Alternatively, breaking $27.49 should really set up a move to fill the $30-32 gap. So going long a break or preferably going long a $30 call option for July 9 could be interesting. Buying options always limits risk. If PLTR moves to fill the gap, the volatility, as well as price, will increase, a double whammy for the option valuation.

The $30 call strike for July 9 is trading at $0.12. July 16 is $0.26 if you want the extra week.