Taking a Fresh Look at Palantir, Rocket Lab and SoFi
The fundamentals behind three former stocks under $10 names offer target prices, pivot points and more.
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Three of our former "Stocks Under $10" names that I have remained bullish on and are long myself in my own accounts have been moving in the right direction of late and have further developed technically... into the set-ups that we had discussed earlier this summer or, in one case, into a stumble and recovery that is still underway.
1. Palantir Technologies (PLTR)
Readers will see that PLTR had traded inside of an ascending price channel since early May 2023. From early March on, the stock had developed a cup-with-handle pattern within this price channel, with a $30 pivot. The lower end of the channel was tested on Monday, August 5, 2024, as the addition of the handle was completed. The stock has now taken back its 50-day SMA and 21-day EMA as its RSI edges towards potentially overbought territory and its daily MACD has turned sharply bullish with the 12-day EMA back above the 26-day EMA and the histogram of the nine-day EMA back above the zero bound.
- Target price: $36 (reiteration)
- Pivot: $30
- Add: Down to the 50-day SMA (currently $26.69)
- Panic: Loss of the 200-day SMA (currently $22.20)
2. Rocket Lab USA (RKLB)
Rocket Lab USA RKLB had been mired in a falling-wedge pattern during the July 2023 through April 2024 period. We know that falling wedges are patterns of bullish reversal and that set up has worked like a charm. The stock faltered along with the broader marketplace in early August, and then resumed its northerly march with some increased urgency as the firm announced its intention to send two spacecraft to Mars in short order.
The stock's 200-day SMA was pressured severely on August 5, 2024, as well, as the line was pierced deeply, but obviously not broken. Here, you also have an RSI that has crossed above the 70 level, indicating a short-term technically overbought environment. This stock's daily MACD has also experienced a bullish crossover of its 26-day EMA by its 12-day EMA, as the histogram of the 9-day EMA has gone positive.
- Target price: $7.50 (reiteration)
- Pivot: $5.85
- Add: Down to the 50-day SMA (currently $5.02)
- Panic: Loss of the 200-day SMA (currently $4.57)
3. SoFi Technologies (SOFI)
SOFI also broke out of a descending wedge (pattern of bullish reversal) in early July 2024, retaking its 50-day SMA at that time. Since then, relative strength had strengthened and subsequently weakened as the stock headed into a double top bearish reversal (that we warned about on July 30, 2024). At that point, the daily MACD turned quite bearish, only to regain a bullish posture this past week. Victory has been a little slower to come in this name of late, as we have experienced in the above two, but I still feel that a bullish move is building.
- Target price: $9.50 (reiteration)
- Pivot: 200-day SMA (currently $7.52)
- Add some: Down to convergence of 50-day SMA and 21-day EMA (currently $6.85)
- Add more: On approach towards the August 5, 2024 low ($6.01)
- Panic: On a new post-August 5, 2024 low.
At the time of publication, Guilfoyle was long PLTR, RKLB and SOFI equity.
