Key Takeaways
- Palantir shares were trading slightly lower on Monday afternoon after ending a three-week loss streak last week. During its decline, the stock dropped as much as 40 percent from its all-time high in mid-February.
- After the price filled a breakaway gap in early February, the shares saw a surge of buying interest. However, they have traded mostly sideways ever since, indicating a lack of decision among market participants.
- Investors should watch key support levels on Palantir's chart around $85 and $66, while also monitoring important resistance levels near $100 and $125.
Palantir Technologies shares (PLTR), which gained ground last Monday for the first time since four weeks, were slightly lower on Monday.
Shares in the data analytics software company had come under pressure amid the political and economic uncertainty that has roiled financial markets, as well as specific concerns that reduced spending by the Department of Defense could cut into Palantir's business. In less than three weeks, the stock dropped nearly 40% from its mid-February record high.
The stock rebounded last week, after the AI investor’s favorite announced six new large customers and inked a product partnership with Nvidia’s (NVDA)-backed Databricks.
Palantir shares, despite their recent retracement have gained 14% since the beginning of the year. They will more than quadruple in 2024 when commercial and public sector clients embrace the AI-powered software that the company offers to customize data and improve efficiency. Recent trading saw the stock down 0.7%, at $85.60.
Below, we examine Palantir’s price chart and use technical analyses to identify key levels that are worth keeping an eye on.
Gap Fill
After the large fall in the price of the stock, investors began to buy the shares after the price filled a breakaway gap at the start of February. In recent months, the price of the stock has remained mostly flat, indicating that market participants are indecisive.
The relative strength (RSI) is still below the 50 threshold but on Friday it reached its highest point in three weeks, signaling an improvement in momentum.
Let’s look ahead and highlight key support levels and resistance levels that investors may be watching on Palantir.
Key Support Levels To Watch
Investors should first keep an eye on the $85 mark. The stock closed above this price on Friday, despite trading below it for most last week. The location is likely to continue to attract attention due to its proximity to the nearby moving average of 50 days and an area that previously provided resistance before last month’s breakaway.
If the bulls are unable to defend this price, it could lead to a decline to $66. Buyers can look for entry points near the top of an earlier pennant pattern which roughly aligns with mid-January’s swing low.
Important Resistance Levels Monitor
If the buying momentum from Friday continues, the shares could move towards the psychological level of $100. Investors that have purchased the recent pullback in the stock may want to lock in profits at this location, near the low of the brief consolidation period which followed last month’s gap.
Finally, a more positive move could lead to another attempt at higher levels near $125. Palantir shares could face selling pressure if they rally to this level. This is close to the stock’s record high (ATH) from last month.
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