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Why Palantir Shares Must Hold This Key Level To Avoid Further Disaster

Benzinga2022-02-18

Palantir Technologies, Inc (NYSE:PLTR) was trading down over 11%  Thursday after suffering a bearish reaction to mixed fourth-quarter financial results.

Palantir reported quarterly EPS of 2 cents per share, which missed the consensus estimate of 4 cents per share. The company reported quarterly sales of $432.87 million, however, which beat the analyst consensus estimate of $417.69 million by 4%.

Palantir’s has been all but demolished over the past year, losing 72% of its value between Jan. 27, 2021, when the stock hit an all-time high of $45, and Jan. 24 of this year when Palantir reached a 52-week low of $11.75. The decline accelerated Nov. 9, when Palantir had a bearish reaction to its third-quarter earnings print and entered into a steep downtrend.

On Jan. 24, it looked as though the tides may have been starting to turn for Palantir because the stock began to make a series of higher lows. Thursday’s plummet has dropped Palantir back toward a key level, however, and if the area doesn’t hold, Palantir could be headed toward all-time lows.

See Also: How to Buy Palantir Technologies Stock Right Now

The Palantir Chart: Palantir had been trading in an ascending triangle on the daily chart, making higher lows but rejecting the $14.23 level on each upswing. On Thursday, Palantir broke down from the pattern on higher-than-average volume, which indicates the bears have taken control.

Palantir has a key support level at $11.75 and bulls will want to see the stock hold above that level. If Palantir tests the area as support and bounces up from the level, it will create a bullish double bottom pattern. If the stock falls through that level, however, Palantir could easily retest the all-time low of $8.92 because there is not a lot of price history below the 52-week low.

On Thursday morning, Palantir’s relative strength index (RSI) was measuring at about 34%. When a stock’s RSI nears or reaches the 30% level it becomes oversold, which can be a buy signal for technical traders. It should be noted the RSI can remain extended for long periods of time and the oscillator can pop back up above the 30% level with a bounce or sideways trading action.

Palantir is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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  • Bulls want Palantir to hold above the key level and trade sideways for a period of time and then for big bullish volume to come in as a reaction to a potential double bottom pattern. The stock has resistance above at $13.18 and $14.58.
  • Bears want to see big bearish volume drop Palantir through the $11.75 mark and for continued momentum to push the stock toward all-time lows. Below the key level, there is support $10.99 and psychological support at $10.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment7

  • Zacccc
    ·2022-02-20
    K
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  • Yellow Tiger
    ·2022-02-19
    Please hit 9 dollars 💵 
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  • CNH
    ·2022-02-18
    💪🏼
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  • Pluto891
    ·2022-02-18
    Gonna hit all time low. Investors who bought and have strong conviction are in for a rough ride. If drop below 10, will mean buying opportunity. Current price is good for a rebound bet. Buy if u dare.
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  • EunJung
    ·2022-02-18
    Omg 
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  • Rekcams
    ·2022-02-18
    Omg.. faint already 
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  • Hangen
    ·2022-02-18
    Bad news.
    Reply
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