After rallying in the wake of impressive Q2 2024 results, the stock of American software company Palantir (NYSE: PLTR) is experiencing short-term bearish sentiments.
Notably, the stock is aiming to hold above the $30 support zone, as this level will likely validate the recent bullish momentum. Currently, PLTR is trading at $31, having recorded a loss of over 4% on the weekly chart.
However, Palantir’s endeavors in artificial intelligence (AI) have helped PLTR maintain gains of over 85% in 2024.
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Overall, the equity has been trading within a narrow range, with recent price action struggling to break through key resistance levels.
PLTR’s stock next targets
Looking ahead, stock trading expert Danny Cheng outlined a possible path for PLTR in an X post on August 8. With the stock showing signs of a potential trend reversal, Cheng noted that PLTR closed August 26 with a yellow candle, typically a bearish signal in technical analysis.
This suggests that Palantir might be entering a period of weakness, making the subsequent few trading sessions crucial for determining its future direction.
Cheng noted that for Palantir to resume its uptrend, a daily close above $31.74 is necessary. This level is a key resistance point that the stock needs to surpass to regain upward momentum. Conversely, if the stock closes below $30.79, it could signal the beginning of a downtrend, potentially leading to further declines.
According to the expert, the PLTR has several support levels that could act as a safety net in a downturn. These include $28.7, $29.2, $29.8, and $30.4. On the upside, resistance levels are identified at $31.2, $31.8, $32.5, and $33.
Palantir’s decreasing whale activity
Additionally, the analysis observed that a significant factor influencing Palantir’s stock is the behavior of large-scale investors. Cheng indicated that whale accumulation has decreased to 75.18% over the past four days. This decline suggests that these major players might be either taking profits or feeling uncertain about the stock’s near-term prospects, which could exert additional pressure on the stock.
From a technical standpoint, the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) are curling downward, reinforcing the bearish sentiment. The MACD’s downward movement indicates that momentum is weakening, while the RSI suggests that the stock may be approaching oversold conditions, though it hasn’t yet reached a critical point.
It’s worth noting that investors will be relying on Palantir’s recent strong performance as a possible guide to continued growth. For instance, the tech firm reported a 27% increase in revenue to $678 million, alleviating concerns regarding the company’s sustainability. Moreover, Palantir’s AI products will likely keep its operations sustainable.
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