Palantir (PLTR) continues to be a stock I believe has the potential to rally strongly in the coming months. After a powerful rally after its’ IPO in late 2020, PLTR went into a deep decline during the 2022 bear market. However, since bottoming, it has seen strong accumulation throughout 2023. This is evident by the large skyscraper volume on its' weekly chart. That type of volume is not “Aunt Suzy” buying. It is funds and institutions coming into purchase stock. It is easy to see why there would be interest in a stock like Palantir. With superb earnings and sales over its’ past four quarters, it is clear that Palantir is delivering numbers that are just impossible to ignore.
Over the past month, PLTR has sported impressive action. The large gap up on stellar volume is another sign of institutional accumulation. More recently, PLTR has pulled back to its’ 20-day moving average. I took a position off this support area for a few reasons. While PLTR has run up sharply, leading stocks often continue to run without large pullbacks. The reason for this is simple: the demand is so strong that shares are gobbled up before any sort of major pullback can take place. This leaves many investors waiting for a reaction that never comes. In addition, I’ve noticed that stocks like AMZN and META have blasted off quite sharply recently without losing their 20-day moving averages. I can easily see PLTR doing the exact same thing. I have a stop loss in place to limit my risk and will be looking to add to my position should a second buy point arise.
Risk right. Sit tight.
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Full Disclosure: I currently own PLTR.
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