Watch These Palantir Price Levels After Stock’s Nasdaq 100 Inclusion
Key Takeaways
Palantir Technologies (
PLTR
) shares are likely to be in the spotlight on Monday after the Nasdaq announced late Friday that the analytics software provider, along with MicroStrategy (
MSTR
), and Axon Enterprise (
AXON
), had been
added to the Nasdaq 100 Index
.
The stock’s inclusion into the
tech-heavy benchmark
comes after it has more than quadrupled from the start of the year as of Friday’s close, boosted by growing demand for the software maker’s customizable
artificial intelligence (AI)
offerings. The company’s shares became eligible to join the index following a strategic move to the Nasdaq from the
New York Stock Exchange (NYSE)
last month.
Below, we break down the
technicals
on Palantir’s
weekly chart
and identify key price levels that investors may be watching out for.
Cup and Handle Bullish Breakout Continues
Since breaking out from a multi-year
cup and handle pattern
in August, Palantir shares have continued to trend sharply higher.
Trading volumes
have supported the move higher, indicating buying participation from larger market participants.
The
relative strength index (RSI)
confirms bullish momentum, though the indicator’s elevated reading above 80 cautions
overbought
conditions, which could lead to near term-price fluctuations.
Let’s apply
technical analysis
to project a longer-term bullish
price target
, while also pointing out key
support levels
that may attract buying interest during retracements.
Chart-Based Bullish Price Target
To forecast a potential bullish price target, investors can use the
measuring principle
, a chart-based technique that analyzes the cup and handle pattern to project a future move.
When applying the method to Palantir’s chart, we calculate the percentage change to the cup and handle’s “cup” and add it to the pattern’s top
trendline
value. For instance, we add a 383% increase to $29, which projects a target of $140.07, around 85% above Palantir’s closing price on Friday.
Key Levels to Watch During Retracements
If
profit taking
occurs, the stock initially could revisit support around $45, a location on the chart where investors may seek buying opportunities near a brief period of
consolidation
in the stock during October.
Finally, selling below this level could trigger a fall into a
zone of support
between $33 and $29. This area on the chart would likely attract buying interest near the cup and handle pattern’s top trendline and the upward sloping 50-week moving average.
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As of the date this article was written, the author does not own any of the above securities.
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