Stock Of The Day: Is This The Top For Palantir?

Palantir Technologies Inc. (NASDAQ:PLTR) shares have rallied since reversing off support around $130. This is an important level for this stock. The $150 level is important as well. There is a good chance there is resistance around this price. This is why Palantir is the Stock of the Day.

In August and in December, the shares found support around $150. A rally followed.

When this happened, many of the people who sold their shares at the support decided their decision to sell was a mistake.  They also decided that if they could ever do so, they would buy their shares at the same price they were sold for.

So when Palantir dropped back to $150 in November, they placed buy orders. The large concentration of these buy orders created support at the level again, and another move higher followed.

But in February, this support broke, and the stock went lower. When this happened, a number of people who purchased shares at around $150 decided their decision was a mistake.

They also decided to hold onto their losing positions. But they also decided that if they could ever sell and exit the positions at breakeven, they would.

Now that Palantir has rallied back to around $150, they will be placing sell orders. If there are many of these orders, it could create resistance at that level.

If the buyers can eventually overpower the sellers and the stock stays above the resistance, this will show that the traders and investors who created the resistance with their sell orders. This is a ‘breakout.’

This can be a bullish dynamic. With the sellers out of the way. New buyers will be forced to outbid each other to draw sellers back into the market. This price action could put Palantir into a new uptrend.

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