Palantir Shares Under Pressure: Key Levels to Watch
After reaching a record high in late December, Palantir shares have been on a downward trajectory, with the stock retreating sharply yesterday and continuing to slide in premarket trading today. This recent selling pressure comes on the heels of Morgan Stanley initiating coverage with an “underweight” rating and reports of Cathie Wood’s ARK Investment Management tech funds selling shares in the company.
A Stellar 2024, But Challenges Ahead
Despite being the S&P 500’s best-performing stock in 2024, with shares more than quadrupling due to growing demand for its artificial intelligence (AI) software products, Palantir is now facing significant headwinds. The analytics software provider’s shares have fallen nearly 18% from their December 24 all-time high, with the stock down 2% in recent premarket trading.
Technical Analysis: Identifying Key Price Levels
A closer look at Palantir’s chart reveals a breakdown from a rising wedge in late December, followed by a retest of the pattern’s lower trendline earlier this month. However, the stock has since faced renewed selling pressure, despite lackluster trading volumes. The relative strength index (RSI) confirms weakening price momentum, dropping below the key 50 threshold for the first time since early August last year.
Support Levels to Watch
Investors should keep a close eye on three crucial support levels where the shares may encounter buying interest amid further selling:
- $66: This level offers a trifecta of support from the mid-November peak, the 50-day moving average, and the nearby 38.2% Fibonacci retracement level.
- $59: A potential entry point below a pennant pattern that formed on the chart in mid-November.
- $45: A deeper correction could trigger a gap fill down to this level, about 35% below Tuesday’s closing price, where investors may seek buying opportunities near two twin peaks that emerged on the chart during October.
Resistance Area to Monitor
Upon a share price recovery and resumption of the longer-term uptrend, investors should monitor the $81 area, where rallies could meet significant overhead resistance near a range of peaks positioned just below the stock’s record high.
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