Palantir Busts Through Heavy Resistance, Options Trader Hammer Calls

Palantir Technologies, Inc PLTR announced a partnership Wejo to develop an integrated data ecosystem for the auto industry. The stock is also popular with retail traders and was trending on r/WallStreetBets.

Options traders believe Palantir’s run has just begun on and Thursday hammered bullish call contracts. Many of the traders chose a strike price above the $30 level indicating they see Palantir’s stock filling a gap between $30.61 and $31.26 the stock left behind on Feb. 16.

The traders purchased dozens of contracts totally in the millions. Below is a look at the most notable options alerts, courtesy of Benzinga Pro:

• At 10:05 a.m., a trader executed a call sweep at the ask of 817 Palantir options with a strike price of $25 expiring on Jan. 20, 2023. The trade represented a $655,234 bullish bet for which the trader paid $8.02 per option contract.
• At 10:33 a.m., a trader executed a call sweep at the ask of 200 Palantir options with a strike price of $32 expiring on Jan. 20, 2023. The trade represented a $114,000 bullish bet for which the trader paid $5.70 per option contract.
• At 11:02 a.m., a trader executed a call sweep at the ask of 1605 Palantir options with a strike price of $32 expiring on Dec. 17. The trade represented a $264,825 bullish bet for which the trader paid $1.65 per option contract.
• At 12:00 p.m., a trader executed a call sweep at the ask of 671 Palantir options with a strike price of $23 expiring on Sept. 17. The trade represented a $362,240 bullish bet for which the trader paid $5.40 per option contract.
• See Also: How to Buy Palantir Technologies Stock Right Now

The Palantir Chart: On Thursday Palantir bust through a heavy resistance level near the $27.50 mark that had been holding the stock down since Feb. 23. Palantir’s stock has been trading in a steep uptrend making fairly consistent higher highs and higher lows since July 19.

Palantir’s relative strength index (RSI) is measuring in at 70%, which puts it into overbought territory and is a sell signal for technical traders. The stock will need to consolidate on the daily chart and put in a higher low to drop the RSI. The higher low could serve as a good entry point for bulls who want to ride the uptrend.

Palantir had above-average volume on Thursday and by mid-afternoon about 79.47 million shares had exchanged hands compared to the average 10-day volume of 41.14 million. Higher than average volume indicates high interest in a stock.

Palantir is trading above the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 200-day simple moving average (SMA), which indicates overall sentiment is bullish. The 200-day SMA is curling down, however, which could be a potential warning signal for the bulls.

• Bulls want to see some consolidation take place and then for big bullish volume to come in and push Palantir’s stock up to make another higher high toward the $30.44 level. If the stock can regain the level as support it could rise up further to fill the overhead gap.
• Bears want to see big bearish volume drop Palantir back down below the $27.50 level. If the stock can’t hold the level as support it could fall back down toward the $25.58 mark.

Photo: energepic.com from Pexels