Palantir Stock falls. To buy the dip, here’s the support level to watch
It’s not a good day for the stock market, with the Nasdaq down more than 2.5% and the S&P 500 down 2%.
It’s even worse for Denver software specialist Palantir (PLTR) – Get the Palantir Technologies report, which is down more than 5% on the day.
The S&P 500 is approaching its first 5% correction in several quarters following Monday’s decline following China Evergrande news.
With China Evergrande at great risk within the Chinese real estate market, investors are concerned about potential systemic risk. Hence the selling pressure on US equities.
While the threat could increase in the days and weeks ahead — some are calling this China’s ‘Lehman Moment’ — others are less concerned.
As for Palantir, nothing specific weighs on the stock on Monday. But high-growth stocks are under pressure because they generally have greater volatility than the general market.
That said, it is technical aspects have been quite impressive lately. Let’s look at the graphs.
Trading Palantir Stocks
Except in early May, Palantir has done a great job of holding the USD 21 level. It did so in July before slowly but surely starting a new uptrend.
The stock eventually recaptured key moving averages, but struggled near the $25.50 level.
However, towards the end of August, Palantir stock broke above this line and then found it as support after struggling with the $27 level and the third quarter high of $27.50.
Despite the overall market weakness leading up to Monday, Palantir was quite impressive.
Over the course of the week, the S&P 500 fell in eight of its previous 10 sessions. During the same stretch, Palantir .’s stock was upwards in eight out of ten sessions.
Furthermore, Palantir finished higher in 13 of the 16 sessions leading up to Monday.
With the stock holding the $27 area and the 10-day moving average, aggressive Palantir bulls are likely to buy the dip today.
While the stock isn’t showing much relative strength on Monday, it has been for much of the past few weeks.
A move back above $27.50 – the high in the third quarter – puts the September high back into play at $29.29. Above that, $30 plus is possible, with a notable gap yet to be filled at $31.34.
On the downside, a break from Monday’s low that isn’t quickly regained could bring the $25 to $25.50 area back into play along with the 200-day moving average and uptrend support (blue line). .