Decoding PLTR Stock: Why It’s an Attractive Investment | Don’t ignore this chart!

Looking at the PLTR stock chart, you can see that the stock has gone from a short-lived glory period in 2021, when it bounced from $10 to $45, to a gentle decline all the way to $10. $5.84.

Starting in April 2023, stock prices are showing signs of revival, with trading volume increasing and stock prices gradually rising. The main reason for this could be their involvement in the AI ​​space. But PLTR’s stock also faced some headwinds as analysts grew concerned about slowing growth due to U.S. government contracts.

Impressive Profits Move PLTR Stock Higher

Palantir’s fourth-quarter earnings report, released after the market closes on Monday, could be the catalyst that sends the stock back to previous highs. Much of Palantir’s growth has come from commercial transactions. Alex Karp, CEO of Palantir Technologies, highlighted the company’s impressive performance in commercial transactions (70% year-over-year growth) during its fourth quarter earnings call. The guidance was also positive.

Stocks posted their biggest one-day gain ever on Tuesday and have continued to rise since. Palantir was filtered by: A new 52-week high Scan from StockCharts. PLTR’s weekly chart paints a good picture of the stock’s price after its 2022 IPO. The stock has surpassed its November high of $21.85 and faces little resistance before the September and November 2021 highs.

Chart 1. Weekly chart of PLTR stock. The stock has surpassed its last high and faces little resistance before reaching the September and November 2021 highs. The SCTR score is 99.Chart source: StockCharts.com. For educational purposes.

Also see StockCharts Technical Rankings. (SCTR) score is 99 (see top panel). From May to November 2023, SCTR scores were around 99, but fell from there. Now that it’s back to its all-time highs, it’s a stock worth following.

Technically analyzing PLTR

If the stock price gap widens after the earnings report, how do you know if the trend will continue? One way to help identify trends is to add an indicator such as the Average Directional Index. (ADX) into a chart (see top panel).

In the daily chart of PLTR stock below, ADX is at 17.62, which is below the 20 threshold used by most analysts. Welles Wilder, who created the indicator, preferred to use 25 as the threshold level. Regardless of which level you use, once ADX crosses the threshold level it indicates a trend.

Chart 2. Daily chart of PLTR stock. Is the rising stock price gap the start of a trend? Monitor ADX and Relative Strength Index (RSI) to see if momentum remains strong. If so, the stock may be a worthwhile investment.Chart source: StockCharts.com. For educational purposes.

Since ADX is trending upward, it could soon reach the 20 level. This is especially true if PLTR’s stock price continues to rise. Remember, momentum can be strong because earnings results are still fresh in investors’ minds. It tends to weaken over time.

To see other filtered stocks on StockCharts 52 week high Scan and check sample scan library Page.

In addition to the ADX line, you can also add +DI and -DI lines to your indicator (select the ADX line (including +DI and -DI from the list of indicators in SharpCharts Workbench). In the daily chart above, the +DI (green line) is It has crossed above -DI, ​​which is considered a buy signal. This happened a few days before the earnings release. It will be positive if +DI remains above -DI when the ADX line crosses above 20. This is an entry condition. The -DI line is + A sell signal occurs when it crosses the DI line.You can also add a tracking stop if PLTR stock moves higher.

relative strength index (RSI) is an indicator that helps identify the momentum of a stock. The RSI is in overbought territory, but this does not necessarily mean the stock is selling. Stocks may remain in overbought territory for an extended period of time. If the stock continues its upward trend and the RSI remains overbought, it means momentum is still strong and investors are still interested in buying the stock.

conclusion

PLTR’s investment in AI data analytics, upbeat earnings, and positive guidance make it a stock worth considering adding to your portfolio. Another positive thing about the company is that it has had four consecutive quarters of positive GAAP earnings. This could result in PLTR being included in the S&P 500. If this happens in 2024, it could be another catalyst to boost the stock price. Most importantly, the stock is trading below $30, making it a cheap AI play for many investors.

disclaimer: This blog is for educational purposes only and should not be construed as financial advice. You should not use any of our ideas and strategies without first evaluating your personal and financial situation or consulting a financial professional.