• Palantir stock closes higher on a negative day for equities.
  • Meme stocks suffer steep falls on Tuesday.
  • PLTR is now stuck in a neutral range.

Palantir stock surprised markets on Tuesday by closing higher, when many retail names were suffering heavy losses. Palantir has a strong retail following but also a strong institutional interest, so it manages to straddle both meme stock and mainline sectors.

Palantir did not see much activity on Tuesday after a very solid opening when the stock was up 1% straight from the opening bell. It then traded sideways for the remainder of the session in light volume. The stock was on the wires due to its BlackSky partnership but in our view, this was not a catalyst to the gains seen from the open. It may have been option related due to quadruple witching (see here) but the move on the open did not see much follow-through.

Jefferies did increase their price target slightly for the stock on Tuesday but from $30 to $31 so, again, not significant. 

Palantir key statistics

Market Cap $50.4 billion
Enterprise Value $47.8 billion
Price/Earnings (P/E) 135

Price/Book

28
Price/Sales 40
Gross Margin 0.7
Net Margin -0.95
EBITDA TTM -$1.24 billion TTM
52-week low $8.90
52-week high $45
Short Interest 3.1%
Average Wall Street rating and price target

HOLD $24.61

 

Palantir stock forecast

Palantir had been trending nicely following a strong earnings breakout. Following this, the stock put in a continuation flag pattern and broke out of this in early September.

This had appeared to set the stock up for more gains with a push to fill the gap from February at $31.34. This was an earnings gap. Along the way the resistance at $27.49 needed to be broken to attract more momentum into PLTR stock. But the longer a stock takes to consolidate, then the weaker the trend becomes, and this is what happened here.

PLTR could not even test $27.49 and lost momentum and interest from bulls. Some profit-taking then hit the stock as equity markets started to turn negative. The stock is just currently holding the top of the flag pattern at $26, but this does not return it to a bullish trend in our view.

Palantir really needs to break $27.49 to turn bullish. Breaking $27 along the way will help, as volume thins out and that should lead to a swift break of $27.49. The Moving Average Convergence DIvergence indicator remains crossed into bearish territory, so this would need resolving before the stock turns bullish. 

FXStreet View: PLTR neutral from $27 to $23, bearish below $23, bullish above $27.

FXStreet levels: Buy the dip at $25 with a stop at $24. The zone from $25 to $23 is strong support, so can be used to buy dips – just please use a stop.

PLTR daily chart

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