The Key Takeaways
- Palantir will likely be the subject of discussion on Monday following the Nasdaq’s announcement late Friday night that the analytics provider was added to the Nasdaq 100 Index.
- Stocks have continued their upward trend after breaking through a cup-and-handle pattern. However, the relative strength indicator warns of overbought situations that may lead to price fluctuation in near term.
- This principle calculates the percent change in the cup’s and handle’s size. “cup” Add it to the top trendline of the pattern, and you get a price target bullish at $140.07.
- Investors should watch key lower levels on Palantir's chart at $45 and a zone of support between $33 and $29.
Palantir Technologies’ (PLTR), MicroStrategy’s (MSTR), Axon Enterprise’s (AXON) and MicroStrategy’s (MSTR) stock will likely be the focus of attention on Monday, after Nasdaq revealed late last Friday that they had all been included in the Nasdaq 100 Index.
Inclusion in the benchmark index for tech companies comes as a result after the stock has quadrupled over the past year. The growth is attributed to the demand of software company’s customized artificial intelligence offerings. Shares of the software maker became eligible to be included in the Nasdaq index after a switch to Nasdaq, from New York Stock Exchange.
We break down Palantir’s weekly chart to identify the key levels of price that investors should be looking out for.
Cup and Handle Bullish Outbreak Continues
Palantir’s shares continue to rise sharply since August when they broke out of a cup-and handle pattern that lasted for several years. Volumes of trade have been supporting the upward movement, showing that large market players are participating in buying.
The relative strength (RSI), a measure of momentum that confirms bullishness, is elevated above 80, indicating overbought situations, and could result in price fluctuation near-term.
Applying technical analysis, let’s project a long-term bullish target price. Let’s also point out support levels key to attracting buying interest in retracements.
Chart Based Bullish Price Target
Investors can forecast potential price targets by using the measuring principle. This chart-based method analyzes the pattern of the cup and handles to predict a possible future movement.
The cup and handle percentage changes are calculated when applying Palantir chart. “cup” Add it to the top trendline of the pattern. If we increase $29 by 383%, the target price is $140.07. This is around 85% more than Palantir’s close on Friday.
Keep an eye on the following levels during a retracement
The stock could initially return to support at $45. This is a place on the chart that investors might look for opportunities in order to buy near the brief consolidation of the stock which occurred during October.
Selling below this level may trigger a drop into the zone of support that lies between $33-$29. Near the trendline of the 50-week moving avg. and the top trendline of the cup and handle chart, this area would be likely to attract buyers.
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According to the article, as of its date of publication, the author did not hold any of these securities.
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