Let’s Follow Up on PLTR! – August 18, 2021PLTR SPY QQQ
This is Scott with your Chart of the Day. Let’s look at Palantir ( NYSE: PLTR ), this is actually a follow-up to Dan Fitzpatrick’s video that he did yesterday. His timing on Palantir ( NYSE: PLTR ) here yesterday was timed perfectly. We actually had a bunch of members bring this stock to my attention in the stockmarketmentor.com forum. We traded this today and it ended up great.
Let’s go through the chart. As you know, Palantir ( NYSE: PLTR ) IPO’d back here in October. And since October, from October to February, it had an almost 370 percent run, not bad at all. But ever since then it has just kind of been choppy and sloppy and flopping around.
As Dan pointed out yesterday, the stock is kind of around a moving average complex here. We have the moving averages kind of really close together, nice and stacked. The stock is currently finding support right around that 50-day moving average, that’s the red line right here.
The thing that caught my eye today was the fact that the stock had a chance to, but couldn’t, break below the 50-day moving average. So the bears had a chance to bring it down, 1, 2, 3, 4, 5 days in a row, and they couldn’t do it. So when I saw that today I said, “Okay, well at least now we have a pretty solid level to define our risk off of, on this stock.”
Then I dial things down to an hourly chart and you can see this nice hourly downward sloping trendline. Resistance, resistance, resistance, resistance, they brought it really close to resistance and then the bulls came in, pushed it higher, and did it on higher than average volume.
So this trade is working out great for a lot of us at stockmarketmentor.com. Now, one thing I will point out is because the market is a little mushy right now with the SPY ( NYSEARCA: SPY ) and the Q’s ( NASDAQ: QQQ ) both under their 8 and 21-day exponential period moving averages. The one caution I had was getting too big in a trade under those market conditions.
I am not super big into Palantir ( NYSE: PLTR ) right here, right now. Only because if the market does continue lower this could potentially come back and retest this breakout and bring it kind of back into this zone here. So I wanted to make sure I wasn’t too big in the trade and I also wanted to maintain my cushion and not chase the stock higher even though it was really going nicely today.
And so I was pretty cautious with sizing into my trade, I have about a two-thirds position in the stock right now. And I will say that it did end the day pretty strong, it tested VWAP at the end of the day and we had some more buying volume come in. And so anyone who shorted this at the close probably ended up covering.
But just because of the market conditions I would just be careful with getting too big in any concentrated position right now. You really want to embrace the cushion if you have it in a trade like this. As you know Palantir ( NYSE: PLTR ) can whip around and sometimes outperform the market.
But really when it comes down to it most stocks follow the market. So if the market does continue lower tomorrow expect a little give back here in Palantir ( NYSE: PLTR ) but ideally we are able to hold above that 50-day moving average.