Palantir’s stock has been on a bit of a rollercoaster ride lately, and the midweek premarket trading session was no exception, seeing a drop after the steep decline the day before. This dip follows the company’s impressive peak at the end of December.
The recent downward momentum came in the wake of Morgan Stanley’s new coverage indicating an “underweight” rating on the stock. Adding fuel to the fire were reports that ARK Investment Management, led by Cathie Wood, had trimmed their holdings in the company.
Late last year, Palantir’s stock slipped after breaking out of a rising wedge pattern, and it now seems to be getting caught in another wave of selling with a failed retest of that pattern’s support line.
For those keeping an eye on Palantir’s movements, some crucial support and resistance zones stand out. Support seems strong around $66, $59, and $45. On the flip side, there’s a key resistance point hovering near $81 that bears watching.
Earlier on Wednesday, Palantir’s shares were down following Tuesday’s nearly 8% nosedive, pulling the stock down 18% from its all-time high set before the New Year.
Given its remarkable performance in 2024 as a standout in the S&P 500, driven largely by demand for its AI software, Palantir has certainly caught the market’s attention. It saw its stock price more than quadruple over the year.
Looking at current trading, Palantir fell 2%, settling around $68.50, which raises questions about what might come next for this analytics tech leader.
Examining the technical indicators, it’s clear that the stock has struggled since it broke away from its December pattern and seemed to revisit the lower bounds of that trend unsuccessfully. Volume is on the lower side, compounding the lack of momentum, and the RSI recently dipped below 50, a notable marker not seen since August of last year.
Investors might want to track how the $66 mark behaves, as it coincides with a past peak, its 50-day moving average, and a specific Fibonacci level when measured from October to December highs. Dropping past this could see the stock pulling back to the $59 mark, which could tempt new buyers below a mid-November pennant formation.
A more severe correction could potentially lead Palantir down to $45. Such a drop would take it 35% below last Tuesday’s close, right to an area marked by twin peaks in October, likely enticing buyers again.
On the recovery side, if the stock’s longer-term upward trend resumes, the $81 range will be significant. Climbing back to that area might bring substantial resistance just before the record high.
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