Watch These Palantir Price Levels as Stock Continues to Retreat From Record High
Key Takeaways
Shares in Palantir Technologies ( PLTR ) were down in premarket trading Wednesday after falling sharply yesterday, as the stock continues to retreat from its record high set in late December.
Recent selling in the shares comes after investment bank Morgan Stanley initiated coverage on the stock earlier this week with an “ underweight ” rating and reports surfaced that Cathie Wood’s ARK Investment Management tech funds had sold shares in the company.
The analytics software provider had a stellar 2024, ending the year as the S&P 500’s best performing stock. Its shares more than quadrupled, boosted by growing demand for its suit of artificial intelligence (AI) software products.
Palantir shares were down 2% at around $68.50 in recent premarket trading, after falling nearly 8% on Tuesday. Through yesterday's close, the stock was down 18% from its Dec. 24 all-time high.
Below, we take a closer look at Palantir’s chart and apply technical analysis to identify key price levels worth watching out for.
Rising Wedge Pattern Breakdown
Palantir shares broke down from a rising wedge in late December before retesting the pattern’s lower trendline earlier this month. However, since that time the stock has faced renewed selling pressure, though trading volumes remain lackluster.
Meanwhile, the relative strength index (RSI) confirms weaking price momentum, dropping below the key 50 threshold for the first time since early August last year.
Let’s point out three crucial support levels where the shares may encounter buying interest amid further selling and also identify a major resistance area to watch during potential upswings.
Crucial Support Levels to Watch
Firstly, investors should monitor how the stock responds to the $66 level. This location on the chart finds a trifecta of support from the mid-November peak , the 50-day moving average , and the nearby 38.2% Fibonacci retracement level when applying a grid from the late October low to the December high.
Selling below this level could see the shares retrace to around $59, a location where investors may seek entry points below a pennant pattern that formed on the chart in mid-November.
A deeper correction in the stock could trigger a gap fill down to the $45 level, about 35% below Tuesday's closing price. The shares would likely attract buying interest in this area near two twin peaks that emerged on the chart during October.
Major Resistance Area to Monitor
Upon a share price recovery and resumption of the longer-term uptrend , investors should monitor the $81 area. Rallies into this region could meet significant overhead resistance near a range of peaks positioned just below the stock’s record high.
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