To The Moon

Hi everyone. Today I’ll be updating my TA on one of the few strong Cathie Wood picks remaining:

Palantir Technologies Inc. (NYSE: PLTR)

PLTR continues to trade in the May’23 ascending channel (in green - redrawn for clarity) I talked about in my newsletter in June. There was a trend markup in Apr’24 that led to a steeper ascending channel (in yellow). PLTR had a false breakdown below the yellow channel that saw a retest of both the consolidation channel (in red) and the May’23 ascending channel (in green).

Currently, PLTR is trading at the top of the channel, having filled the 30.44-31.34 bearish gap from Feb’21. Weekly bearish divergence appears to be forming, but will require confirmation from this week’s close.

The daily chart shows the channels in greater detail. We are trading at the confluence of the yellow and green channel resistance trendlines, while the Stochastic oscillator has hit extreme levels with a close to 100, 100 reading. While stocks can stay elevated at this level for a period of time, it will also depend on lower timeframes to signal the top.

On the 4h chart, we can see a bearish divergence on the Stochastic oscillator, while there is none on RSI at the moment. We can expect a short-term pullback into support, with near-term targets at the 30.44 gap support and the 29.19 prior resistance.

PLTR could continue to push higher into the 33.50 or even 35 resistance, but the likelihood of a correction into a seasonally bearish window is there. Considering that PLTR has no “guaranteed” catalyst - the next ER is in November and S&P 500 rebalancing (PLTR is one of the candidates for inclusion) takes place only in September. For the correction, I’m looking towards the 24.42-25.57 area as a first stop.

I’ll personally start adding PLTR around that level. Risking it further for support at 22.17 and subsequently the 17.87-19.76 level, which would be the area where I am willing to take the most risk on PLTR.

Could PLTR also melt up and breakout from the green channel? It could, but it has to break and hold above 33.50 for either a breakout trade or a sustainable uptrend. Otherwise, the risk-to-reward favours bears. Holding above 33.50 opens up levels from 35 all the way to 45 (last ATH).

Jackson Hole (Powell to speak) could disrupt my ideas, but I urge investors/traders to look at the daily close post-Jackson Hole for clarity, and to act accordingly.

In light of PLTR’s current setup, I am downgrading it to a HOLD (previously a BUY). This takes the long-term uptrend into consideration while also placing weight on a pullback due to seasonality.

Sentiment: HOLD (Downgraded from BUY)

Summary (with Price Targets - NFA):

• Trading at the top of the ascending channels (green and yellow)

• Risk for bears is a breakout and hold-type price action above 33.50, which would open up levels from 35 to 45

• Risk for bulls is a failure to breach 33.50 (potential short-term exhaustion top with a smaller daily bearish divergence) which would open up supports below

• Risk-to-reward appears healthy to me only at the 24.42-25.57 bullish gap fill, with larger size adds towards 23.52, 22.17 and the 17.87-19.76 bullish island gap

@TigerStars @TigerWire @TigerEvents @CaptainTiger @MillionaireTiger

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