PreMarket Prep Stock Of The Day: Palantir

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

There are hot stocks in the news and then there is Palantir Technologies PLTR, which is the PreMarket Prep Stock Of The Day.

The Company: Palantir Technologies provides organizations with solutions to manage large disparate data sets in an attempt to gain insight and drive operational outcomes. Founded in 2003, Palantir released its Gotham software platform in 2008, which focuses on the government intelligence and defense sectors.

See also: Best Online Stock Brokers

Sneaky Price Action Off IPO: On its first day of trading, it had a range from $9.11 to $11.42 and ended the session at $9.50. Over the next 25 sessions, it expanded the bottom range but not by much as it put in a trio of lows just under $9, with the ultimate low being $8.90.

The closest it got to the top of the range was on Oct. 27, when it reached $11.04.

Breakout: After ending its Nov. 4 session at $10.72, It breached the IPO initial high ($11.42), rallying to $12.13, and fell back to end the session above the breakout price at $11.88,

For investors that did not strike on that day, they've never had the chance as the lowest it reached was the following day, when it bottomed at $12.05 and never looked back.

The Cathie Wood Effect: On Nov. 13, it was disclosed that fund manager Cathie Wood had added over 1 million shares of the issue to her Ark Next Generation ETF ARKW. The news had a modest impact on the issue on the following Monday (higher by $0.13 to $15.93) but had a major impact the next day as it rallied to $17.85.

With the vote of confidence from Wood, momentum and algorithmic traders piled into the issue and drive the price higher and higher. Following a long consolidation period at the $25 area in December and into mid-January, it exploded to its all-time high at $45 and all-time closing high ($39) on Jan. 27.

Profit-Taking Into Q4 Report: Ahead of its fourth-quarter earnings report, the issue went into retreat mode as investors were locking in profits.

As a result, the issue skidded to $31.91 the day ahead of the report. The beat for EPS and revenue was not good enough and the issue swooned to $27.84 in Tuesday’s session.

Cathie Wood Strikes Again: After dipping her toe in the water on Tuesday and Wednesday purchasing a modest amount of shares, she went in big time on Thursday adding to her stake by 5.27 million shares. Interestingly, the issue traded down to $24.50 and traded a majority of the day's volume in the $25 handle, ending the day at $25.17.

Rinse And Repeat: When the Ark Trading Desk daily email, which details the buy and sells for the day, was delivered to subscribers, the issue caught a bid that hasn't stopped.

After nearly $2 higher open, it retreated only to $26.90 before bouncing back near the $30 level. If the rally continues, Tuesday’s high was $30.44 and there is a void in price from last Friday’s price action, where the session low was $31.34.

Photo courtesy: Cory Doctorow via Flickr