The shares of Palantir fell by more than 9% on 19 August, on heavy volume. The sharp decline caused significant technical damage to the chart. The uptrend that the stock had been following since July 1 was broken with ease. Meanwhile, the share price fell below the 10-day exponential moving average and the 20-day simple moving average, indicating that a change in trend may be developing.
The lower Bollinger Band is currently at $144.25, while the relative strength index stands at 43.8, indicating the stock is nowhere near oversold and could fall a further 8% before approaching such levels. Moreover, the share price has dropped below a key technical support at $160.50, an area that had previously acted as resistance in the run-up to the company’s results at the end of July.
Based on the chart, there should be firm support for the stock at the lower Bollinger Band around $145, which also coincides with a technical support level formed in late June. If the shares fail to hold that support, the risk is a move back towards $120.
If a change in trend is indeed underway, it will need to be confirmed on the next rally attempt. As long as the stock remains below the falling 10-day exponential moving average and the 20-day simple moving average—both of which should now act as resistance—the path is likely towards much lower levels. However, if the stock manages to break out and rise above those resistance levels, a return to the all-time highs cannot be ruled out.
Written by Michael J. Kramer, founder of Mott Capital Management.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
The lower Bollinger Band is currently at $144.25, while the relative strength index stands at 43.8, indicating the stock is nowhere near oversold and could fall a further 8% before approaching such levels. Moreover, the share price has dropped below a key technical support at $160.50, an area that had previously acted as resistance in the run-up to the company’s results at the end of July.
Based on the chart, there should be firm support for the stock at the lower Bollinger Band around $145, which also coincides with a technical support level formed in late June. If the shares fail to hold that support, the risk is a move back towards $120.
If a change in trend is indeed underway, it will need to be confirmed on the next rally attempt. As long as the stock remains below the falling 10-day exponential moving average and the 20-day simple moving average—both of which should now act as resistance—the path is likely towards much lower levels. However, if the stock manages to break out and rise above those resistance levels, a return to the all-time highs cannot be ruled out.
Written by Michael J. Kramer, founder of Mott Capital Management.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.