The Bull, Bear Case For Palantir Stock After Powell's Tone Spooks Markets

Palantir Technologies, Inc (NYSE:PLTR) ended Friday 5.7% lower in sympathy with the general markets, which reacted bearishly to U.S. Federal Reserve Chair Jerome Powell’s hawkish tone during his speech at the Jackson Hole Economic Symposium.

The big data analytics company was on a downwardward path prior to Powell’s speech after breaking down from a head-and-shoulders pattern on Aug. 19.

The full measured move of the breakdown of the pattern was hampered when Palantir bounced up off a long-term descending trendline, which Benzinga predicted the day prior was likely to occur. 

If Palantir continues to trend lower, the stock may find support at the trendline again, although that will mean the downtrend could continue for some time.

The bullish scenario is that Palantir holds above its low-of-day price near the $8 mark, which may cause the stock to print a bullish triple bottom pattern at the level.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Palantir Chart: Palantir entered into a downtrend on Aug. 5 and started to print a consistent series of lower highs and lower lows. The stock’s most recent lower high was formed on Thursday at $8.43 and the most recent confirmed lower low was printed at the $8 mark on Aug. 23.

• If Palantir closes the trading day near its low-of-day price, the stock will print a bearish engulfing candlestick, which could indicate lower prices are in the cards for Monday. If the stock is able to bounce up and form a lower wick, Palantir will print a hammer candlestick, which could indicate the next lower low has formed and the stock will trade higher on Monday.
• A bounce is likely to come over the next few days because Palantir’s relative strength index (RSI) is measuring in at about 35%. When a stock’s RSI nears or reaches the 30% level, it becomes oversold, which can be a buy signal for technical traders.
• When the inevitable bounce eventually comes, bullish traders will want to see Palantir regain support at the eight-day exponential moving average, which could help support the stock. The eight-day EMA has been pressuring Palantir lower since Aug. 8 and may eventually force Palantir back down toward the long-term descending trendline.
• Palantir has resistance above at $8.92 and $9.79 and support below at $8 and $6.44.

See Also: Will The Real Palantir Please Stand Up?

Photo via Shutterstock.