These Two Charts Show Where Palantir Might Go From HerePalantir Technologies NYSE:PLTR rose this week after the security-software firm beat the Street on Q2 earnings and revenue generation and raised expectations for Q3 sales and profitability. What does technical analysis tell us about where it might go from here?
First, some background. PLTR gained some 11% Tuesday and another 11% Thursday afternoon (after a 1% pullback Wednesday) following the company’s report Monday after the bell of $0.09 in adjusted Q2 earnings per share on $687.1 million of revenues. That beat the $0.08 EPS and $652.8 million in sales that analysts’ consensus estimate had expected.
The company also increased its full-year revenue guidance to $2.74 billion-$2.75 billion, up from a previous $2.68 billion-$2.69 billion guide and the $2.7 billion analysts had previously forecast.
Palantir’s brand has already been widely accepted by government users, while the commercial sector is seeing the company’s products more and more as a necessity. (Full disclosure: I was long PLTR at the time of this writing.)
The company’s operating and free cash flows appear strong, as does its current ratio. PLTR also has no debt whatsoever on the books. No short-term debt. No long-term debt.
Here’s a look at its chart as of Thursday afternoon, Aug. 8:
The stock has been trading in an ascending price channel going back to early May 2023, as seen by the blue- and pink-shaded areas above. It's been steady and in the grand scheme of things, not very volatile.
Now, let's zoom in and look at the stock’s year-to-date chart:
Readers will note that from early March on, PLTR developed a cup-with-handle pattern, as denoted by the purple lines above. This pattern has a $30 pivot point, marked with the horizontal purple line above.
Prior to Tuesday and Wednesday’s rally, the stock had tested its 200-Day Simple Moving Average (the red line above) on Monday, completing the cup's handle. Palantir has also taken back its 50-Day Simple Moving Average, as denoted by the blue line above.
Meanwhile, the stock’s Relative Strength Index (RSI) has returned to a better-than-neutral posture, as marked with the gray line at the above chart’s top.
And at the chart’s bottom, what was a bearish-looking daily Moving Average Convergence/Divergence (MACD) is attempting to curl the 12-Day Exponential Moving Average (or “EMA,” marked with the black line above) back towards the 26-day EMA (the orange line). That’s historically a bullish sign.
Meanwhile, the histogram of Palantir’s 9-Day Simple Moving Average (SMA) is moving towards the zero bound, as denoted by the blue bars above. That’s also historically a bullish indicator.
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