Palantir Technologies (PLTR) Stock Price and Forecast: Selloff continues below $19

Update May 10: Palantir Technologies Inc (NYSE: PLTR) closed the previous seven trading days in the negative territory and started the new week on the back foot. After opening with a bearish gap on Monday, PLTR extended its slide and touched its lowest level since late November at $18.18. As of writing, the stock was trading at $18.50, losing more than 6% on a daily basis. The near-term technical outlook, which is detailed below, suggests that additional losses remain in the book. In the meantime, the S&P 500 Index is edging lower following Friday's record-setting rally and was last seen losing 0.45% at 4,213.

Never a good sign when everything is going up but PLTR closes lower. The jobs report on Friday was terrible, but the market rallied anyway. Interest rates are set to stay lower for longer now. Stimulus is not going anywhere. Tech stocks in particular love low rates. PLTR should have had a big day given its projected growth in earnings.

Tech and high growth, high P/E stocks love zero interest rates because future cash flows are discounted to present value. The lower the interest rate, the lower this discounting, the higher the present value of future cash flows, so the higher the stock valuation. The Nasdaq was the first index to rally after Friday's terrible jobs report for this very reason.

PLTR is forecast to have a very high growth rate. It forecast compound annual growth rates of 30% in its Q4 2020 results, something which led to Goldman Sachs issuing a strong upgrade. This high growth rate is exactly the sort of discounting that should have led PLTR shares higher on Friday. Instead, they closed at $19.75, down 1.69%, closing below $20 for the first time since November last year. 

Palantir launched on the stock market at the end of September 2020 at a reference price of $7.25 a share. PLTR was co-founded by legendary Silicon Valley investor Peter Thiel. The firm is a data mining and analytics technology company. It helps companies integrate and analyse their various diverse data sets to help make sense of complicated data. Palantir streamlines decision-making based on data analysis. The company helps with search functions and is heavily involved in the security industry, with links to law enforcement agencies such as the FBI, CIA and Department of Defense.

PLTR stock forecast

PLTR have been one of the retail meme stocks for 2021 which huge resultant spikes in price and volatility. But it has all been fairly negative recently with the stock sliding lower for seven consecutive sessions. 

The sentiment has not been helped with recent notable insider selling as the post lock up period came to a close. Insiders have repeatedly been selling stock. Added to the negative sentiment was Reuters breaking of the CEO's $1.1 billion pay package for 2020. 

All these developments have not helped the share price and even a notable supporter such as Cathie Wood of ARK Invest has not been able to halt the slide. ARK has been repeatedly buying up large chunks of PLTR. 

PLTR technical analysis: Breaking below triangle formation

Technically, breaking the lower end of the triangle formation gives a price target of $14.33. The breakout from a triangle is the size of the entry, in this case over seven dollars. PLTR also broke the important $20.97 support on Thursday. This ended a series of higher lows and confirms the bearish trend. $20 is an obvious round number, a psychological level, and closing lower than that on Friday is a big no-no. The Moving Average Convergence Divergence (MACD) also gave a crossover sell signal on May 4 as did the Directional Movement Index.

PLTR resistance is at $20.97 and then $21.56 which is both the 9-day moving average and the bottom of the triangle. PLTR remains bearish unless this level is breached.

Previous updates

Update: Palantir Technologies Inc (NYSE: PLTR) has been extending its falls at the beginning of the new week, shedding an additional 3.50% to battle the $19 level. How low can shares go? As explained below, the tech company's shares are in bearish territory, with one of the main triggers coming from the fact that the CEO sold some of his holdings. Will bargain-seekers jump in? That is still to be seen.

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