A Palantir Stock Price Breakout Could Happen Now
A close look at the software company shows it is knocking on the door of a breakout.
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I've been writing to you often about Palantir Technologies PLTR, for good reason. The name is a top-ten holding of mine.
I'm focused on that fact and the fact that there seems to be, on an almost-regular basis, a need to either bring readers some news or defend the stock — as I had to do a couple of weeks ago when a highly-rated analyst that had never been a Palantir bull (and been wrong the whole time) downgraded the stock. Since that Brian White (Monness) downgrade, by the way, Mariana Perez Mora of Bank of America, who is also rated at five stars by TipRanks, spoke her mind. Perez Mora reiterated her "buy" rating on PLTR last week while also reiterating her $28 target price. Perez Mora sees great benefit in defense AI integration for the firm as well as continued momentum on the commercial side via Palantir's AIP "bootcamp" program.
Earnings
Palantir is expected to report the firm's second quarter financial results on or around August 7, 2024. Wall Street is looking for an adjusted EPS of $0.08 (or GAAP EPS of $0.03) on revenue of a rough $653 million. This would be up from the year ago comps of $0.05 (adjusted) on more than 22% revenue growth. For the full year, according to consensus, Palantir is on track for 32% earnings growth and still 22% revenue growth. A mere 3.6% of the float is currently held in short positions. While that means that the retail investment community, which appears to be very interested in Palantir, cannot create a short squeeze, it also means that nobody big and powerful is betting against the stock.
Knocking on The Door
I last showed you this chart about two weeks ago, as the cup pattern was still developing the now clear-to-see handle. Relative strength is now in a better position without being technically overbought. The daily MACD is now more bullishly postured with the 12-day EMA curling away from the 26-day EMA and the histogram of the nine-day EMA still in positive territory. My pivot remains the same, as does my target price. The only difference now is that, for a second day in a row, that pivot is being tested from below. Here is where the stock will either be rejected or benefit from a slingshot-like burst of momentum.
Palantir Technologies (PLTR)
- Target Price: $32 (reiteration)
- Pivot: $26
- Add: Down to the 200-day SMA (currently $20)
- Panic: On a loss of that 200-day SMA.
Note: I believe my target price for PLTR is the second highest on Wall Street, only to Dan Ives of Wedbush who has a $35 target on the stock. Joseph Bonner of Argus Research would be third with a $29 target.
At the time of publication, Guilfoyle was long PLTR equity.
