Palantir gapped up today after it reported strong earnings. PLTR has long been on my watchlist, as I noted last summer that the large skyscrapper volume on its' chart was not "Aunt Suzy buying" as William O'Neil would say. Today, PLTR finished up over 30% on massive volume. That type of move can only be created by large funds and institutions coming in to purchase the stock. It appears that Wall Street likes what is taking place with Palantir, as few stocks can produce what it has: five consecutive quarters of triple-digit earnings growth combined with accelerating sales over its' last three quarters.
I traded PLTR in 2023 but was knocked out as it declined. However, because of the strong accumulation on its' weekly chart and its' stellar fundamentals, I made it a point to keep it on my watchlist. I began to monitor it closely as it approached its' 40-week line earlier this year. Last Friday, I opened a small pilot position with a stop loss below Palantir's 200-day moving average. Now you may be wondering, if I'm so bullish on PLTR, why would I open a pilot position? The reasoning is simple: no matter how bullish I am on a stock, I must always guard against risk. I knew Palantir was set to announce earnings on Monday after the close and I did not want to open myself up to the risk of a major gap down. I decided instead to buy a very small pilot position so that my account would not be affected much even on a sharp decline at the open. I would always have the opportunity to add on a gap up if an opportunity arose. That's exactly what happened today. I was able to add to my position around lunch time as PLTR started to rally after pulling back to the 20-period moving average on its' five-minute chart.
Palantir actually looks fantastic across multiple time frames. The daily and weekly charts are showing massive accumulation, the five-minute chart illustrates the supportive action today, and even the monthly chart looks like its' forming a large cup and handle base. When we look at the daily chart, we can see that a large gap up from last May was actually the start of a major move in PLTR. This is actually what I believe may be happening now. While Palantir may seem extended, this may actually be just the beginning of a much bigger move. Although I already own PLTR, I will still be interested in adding shares at a higher level should a proper buy point develop.
Risk right. Sit tight.
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Full disclosure: I currently own PLTR.
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