Palantir Technologies Inc. experienced a significant jump in its stock price during after-hours trading on Monday, following the company’s impressive third-quarter earnings results and an optimistic forecast for full-year revenue. The analytics software provider reported strong demand for its artificial intelligence (AI) offerings, prompting investors to reassess their outlook for the stock.
The shares had previously consolidated within a broadening formation ahead of the earnings announcement, but bullish investors successfully defended the lower trendline of this pattern. Notably, trading volume reached its highest level since early October on Monday.
Investors should closely monitor key resistance levels at $45 and $60, while also paying attention to a crucial support zone between $41 and $38, particularly during any profit-taking episodes.
Post-Earnings Performance
Palantir (PLTR) shares soared by 14%, closing at $47.09 in after-hours trading on Monday. The company highlighted strong AI demand from both government and commercial sectors, asserting that the rapid adoption of its platforms will drive future growth. The stock has more than doubled since the beginning of the year, partially due to its recent inclusion in the S&P 500 index.
Technical Analysis: Broadening Formation Breakout
Following a breakout from a flag pattern in early September, Palantir shares saw a sharp increase over the next month before consolidating within a broadening formation. As the earnings announcement approached, selling pressure emerged; however, bulls defended the lower trendline of the formation, resulting in a significant increase in trading volume.
With the anticipated earnings-driven breakout above this broadening formation expected on Tuesday, several key price levels warrant attention.
Key Overhead Levels to Watch
The first critical level to monitor is $45. While the stock is poised to open above this level on Tuesday, a close above $45 is essential as it aligns with the stock’s all-time high (ATH) and the upper trendline of the broadening formation.
To project potential future price targets above the ATH, analysts can apply a bars pattern technique, which utilizes previous price movements to forecast future trends. By overlaying the price action from September to October onto the lower trendline of the broadening formation, a target price of approximately $60 emerges.
Important Support Zone to Monitor
In the event of profit-taking, investors should keep a close watch on the support zone between $41 and $38. This area is significant as it coincides with the broadening formation’s lower trendline and the September peak, where buying interest may re-emerge.
Overall, as Palantir navigates this post-earnings landscape, these technical levels will be crucial for investors looking to capitalize on the stock’s potential growth trajectory.
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