Palantir Bulls Bought The Dip: What's Next?

Palantir Technologies Inc’s PLTR stock gapped up 1% Friday after the company said it was awarded an $111 million contract with the U.S. Special Operations Command.

The stock filled the gap during Friday's trading session and closed flat, indicating some consolidation was needed on smaller time frames. 

The Palantir Chart: Palantir printed a bullish inverted hammer candlestick on Tuesday, with the lower wick indicating traders and investors purchased the stock every time its price dipped below $23.

Palantir’s first-quarter 2021 earnings beat on May 11 marked the bottom. Since then, the stock has climbed up 36% and back into a channel between a support level at $21.04 and a resistance zone near $25.

Palantir’s chart has a gap at the $30 level left behind from Feb. 16, when it reported fourth-quarter 2020 earnings. Gaps on charts fill 90% of the time, so traders can expect Palantir’s stock to reach up and fill that gap in the future.

Palantir is trading above the eight-day and 21-day exponential moving averages, and last week the eight-day EMA crossed above the 21-day EMA. Both are bullish indicators. The 200-day simple moving average is not available for Palantir’s stock because it went public on Sept. 30 and has been trading for only 165 days.

See Also: How to Buy Palantir Technologies Stock Right Now

Bulls want to see big bullish volume come in and push up over $25.30. If Palantir’s stock can regain that level as support, it has room to move toward the $30 level, which would put it within reach of the gap. It is possible that Palantir needs some sideways consolidation before making a bullish move north.

Bears want to see bearish volume push Palantir’s stock back down under the $21 level, which would cause it to lose support of the eight-day and 21-day EMAs. A loss of those three levels could see Palantir revisit the $17 mark before potentially bouncing.

PLTR Price Action: Shares of Palantir were down 0.97% at $22.97 at last check Wednesday. 

Photo courtesy of Palantir.