PLTR Stock – Palantir Technologies still struggling for upside momentum
- PLTR shares struggle to participate in the recent rally.
- Palantir to showcase Foundry product at April 14 demo day.
- ARK Invest still favours the big data darling.
Palantir shares are still struggling for some strong directional cues as the retail meme stock effect appears to have faded. The once heavily favoured retail meme was pushed from $26 to $44.98 in a matter of days in January as peak Reddit mania hit certain stocks. Since then PLTR has retraced and has been rangebound at $22-$26 for most of March and April.
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Palantir Technologies (PLTR) launched on the stock market at the end of September 2020 at a price of $7.25 a share. PLTR was co-founded by legendary Silicon Valley investor Peter Thiel. The firm is a data mining and analytics technology company. It helps companies integrate and analyse their various diverse data sets to help make sense of complicated data. Palantir streamlines decision-making based on data analysis. The company helps with search functions and is heavily involved in the security industry and has links to law enforcement agencies such as the FBI, CIA and Department of Defense.
PLTR stock forecast
Palantir shares have had some positive and negative developments so far in 2021, which at least has kept things interesting! The retail crowd got hold of it and drove it higher ahead of results. Cathy Wood of ARK Invest has also been buying a decent amount of the stock, further emboldening retail investors.
Post the release of results in mid-February, the shares have struggled. It is not that the results were that bad. In fact, Goldman Sachs upgraded PLTR post results. But investors grew increasingly worried about possible sales by insiders due to the expiry of a lock-up period. All this has seen volatility in PLTR shares drop, probably not a bad thing. The shares have traded in a $22 to $26 range for most of March and April.
So where to from here? The company, as mentioned, has solid government contracts. Always a positive, as governments are sticky customers, less likely to shop around and can be price inelastic. On Monday Palantir announced it had been selected by the National Nuclear Security Administration for a five-year, $89.9 million contract. So another government contract to add to its growing list.
At current levels and sales, the valuation metrics look a little stretched, but if Palantir continues to meet its impressive growth rates, it will “grow into” its valuation.
Technically, the stretched resistance to take out and resume a bullish trend is at $27.47, the mid-March high. Before that, the 21-day moving average resistance was tested at $23.93. The MACD has crossed over, giving a buy signal, and a move above recent highs near the 21-day resistance would be a nice confirmation.
Support at $21.18 really has to hold to keep any chance of bullishness.
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