During Wednesday's "Lightning Round" segment of Mad Money, one caller asked Jim Cramer about Palantir Technologies (PLTR) : "We're not sure exactly what they're up to but I think they're right for this market," said Cramer about the software company that specializes in big data analytics.
Let's check out the charts and indicators.
In this daily Japanese candlestick chart of PLTR, below, we can see that prices tripled in about four to five weeks of trading. After a surge to the upside in late November prices have corrected sideways to lower. Prices have been trading around the short 20-day moving average line and remain above the rising 50-day line.
The On-Balance-Volume (OBV) line shows a decline from late November telling us that sellers of PLTR have been more aggressive. The trading volume has been declining since late November suggesting that "hot money" may have found other places to trade.
The Moving Average Convergence Divergence (MACD) has been weakening since early December but is still above the zero line.
In this daily Point and Figure chart of PLTR, below, we can see the price action without all the "noise" and no volume. The X's and O's suggest a decline to $17 is possible.
Bottom line strategy: PLTR has been making lower highs since late November. I sense that a lower low could be coming soon. Stand aside from the long side. The $17 area may be a level to watch for purchases.
