Palantir stock exhibits bullish pattern with 80 target yet anticipates an imminent pullback
After reaching a new all-time high, technical indicators suggest that Palantir’s stock (NYSE: PLTR) has the potential for further gains. However, concerns are arising regarding the sustainability of this upward momentum.
Currently trading at $44.86, with a brief peak at $45, Palantir’s market capitalization has surpassed $100 billion for the first time. The company’s foray into artificial intelligence (AI) has contributed to its rally, with the stock experiencing a 170% increase year-to-date.
According to stock trading expert SmartReversals, Palantir’s monthly chart displays a bullish “cup and handle” pattern, indicating a potential target of around $80 to solidify its rally by 2024. The “cup” represents a period of accumulation as the stock steadily recovered from its lows in 2022 to its current price. The breakout point at around $45.07 serves as the upper resistance level. Should Palantir form the handle and surpass this resistance, it could initiate a bullish push towards the $80 target. However, it should be noted that the handle does not always form.
On the other hand, momentum indicators such as the Money Flow Index (MFI) and Relative Strength Index (RSI) suggest that the stock is currently overbought, with readings of 83.18 and 77.23, respectively. These elevated levels indicate the possibility of a short-term correction.
Palantir’s potential for surpassing $45 in the near future is likely to be influenced by its upcoming Q3 2024 earnings report, scheduled for November 4. Analysts have high expectations for the company’s AI products, especially for government and commercial clients, following the $678.13 million revenue recorded in Q2 2024, representing a 27% year-over-year growth. The company’s full-year revenue guidance stands at $2.746 billion. Industry experts, such as Dan Ives from Wedbush, compare Palantir’s AI capabilities to Lionel Messi, the famous Argentinian soccer star, and anticipate increased demand for its AI platform in 2025.
However, some dissenting voices argue that Palantir’s stock may not align with the company’s valuation. These skeptics believe that the stock is priced based on anticipated future growth, and it may falter if the company fails to meet these projected targets.
In light of the ongoing valuation debate surrounding Palantir, stock market analyst Sammy McCallum remains optimistic, suggesting that the company has the potential to reach a market cap of $150 billion. He dismisses concerns about valuations and emphasizes that Palantir is an exponential growth company that Wall Street is just beginning to recognize.
McCallum points out the formation of a multi-year “cup and handle” pattern, indicating the potential for a breakout. After surpassing the resistance range of $30-$35, the stock cleared the way for further gains. Fibonacci extension levels provide additional targets, with the next major resistance level indicated around $69.20, near the 61.8% Fibonacci level.
To continue its growth, Palantir must solidify $45 as a support level before targeting $50.
