Palantir - Retail darling entering danger zone FUNDAMENTAL REASONS:
1. Palantir's high P/E and P/S ratios suggest the stock is overvalued, making it vulnerable if growth doesn't meet expectations.
2. Revenue growth is decelerating, which could lead to a revaluation of the stock price as the company matures.
3. Palantir has struggled with consistent profitability and has thin margins, raising concerns about its ability to generate sustainable earnings.
4. Heavy use of stock-based compensation leads to shareholder dilution, which can put downward pressure on the stock price.
TECHNICAL REASONS:
1. Potential fifth wave impulsive wave to the upside. This can either get rejected at the weekly (where we are now) or take one last move to the upside at the Monthly, which is a stronger level of resistance.
2. Ascending wedge pattern - higher probability of breaking down as it’s a bearish pattern.
3. Fibonacci confluence supporting the above.
Potential trade:
To play it safe you can set a tight stop above the horizontal levels, above the monthly just in case we break above that in a euphoric market. Anything can happen so play it safe.
Not financial advice!
