I last reviewed the shares of Palantir Technologies (PLTR) on August 7 and wrote that " Palantir has made some impressive gains for traders and investors since December... but with prices pulling back... with some bearish divergences I recommend that traders who are long PLTR should nail down profits... and we'll look for a re-entry area in the months ahead."
Let's check on the charts again today for Palantir, which is a holding of the Stocks Under $10 portfolio.
In the daily bar chart of PLTR, below, I can see that the shares corrected to the downside during August. The shares are trading below the 50-day moving average line and above the 200-day moving average line.
The On-Balance-Volume (OBV) line has been stalled the past three months. The Moving Average Convergence Divergence (MACD) oscillator fell below the zero line in August for an outright sell signal.
In the weekly Japanese candlestick chart of PLTR, below, I see a mixed setup. I can see a top reversal pattern on the candles in July. Prices turned lower but have stabilized in the $14 area in recent weeks.
The OBV line has been strong since November and suggests that traders have remained aggressive buyers of PLTR on its rise and its correction. The MACD oscillator is above the zero line but has crossed to the downside for a take profit sell signal.
In this daily Point and Figure chart of PLTR, below, I can see a downside price target in the $8.50 area.
In this weekly Point and Figure chart of PLTR, below, I can see a downside price target in the $8 area.
Bottom-line strategy: If a trader was nimble this past year they could have tripled their money if they bought and sold PLTR correctly. That move is in our rear-view mirror. What lies ahead, I believe, is a downward correction back to the $8 area. Avoid the long side of PLTR.
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