Will AI And Defense Contracts Catapult Palantir Technologies (PLTR) Stock?

Palantir Technologies (PLTR) does things in its own way. Most Silicon Valley tech firms tend to stay within their neighborhood. What made this data mining company move from the hub of tech, Silicon Valley, to Denver? Does it matter to you if you are only concerned with its stock price movement? It must have been something quite significant to make the move.

I am not big on digging into the details of a company or its stock. Far more people who are far smarter and more well-trained than me do that for a living. I have no idea if AI will amount to anything or not. Maybe it will be the biggest bang in the next decade. And Palantir (PLTR) is well-placed to be the best AI stock there is. Or maybe AI will be the biggest and latest hype that did not live up to the billing. Who am I among the billions of inhabitants on the planet to predict? Even Nostradamus was wrong in some of his predictions.

All I know is that if someone is hyping a stock, they have a motive. All hype is due to some behind-the-scenes motivation. On the other hand, if something is being done quietly, under the radar, there is motivation behind that too.

All this hard thinking makes my head hurt. Why bother with all that when you can see and observe certain things that are obvious on a stock chart and its performance? And what does the price volume chart of Palantir Technologies (PLTR) show? First, take a quick look at Palantir’s (PLTR) all time weekly chart. What do you see? Do you observe anything that is obvious?

A Closer Look At Palantir (PLTR) Stock IPO

What if I focus your eyes on the beginnings of Palantir (PLTR)? And bring your eyes to the beginnings of PLTR stock, right after Palantir’s IPO. What do you see? Do you observe anything? Take a second look for a second before you continue reading and see if you can think of anything you can clearly observe, something obvious. Pay attention to the price and volume movements from October 2020 to February 2021. There is something that everyone can agree upon that even a fifth grader will not question. If you bring your eyes closer and see the chart below, now do you see something obvious? Highs are marked with white arrows and the low with a red arrow.

Palantir (PLTR) Stock Breakout?

In most stock traders’ parlance, it could be said that the Palantir (PLTR) showed a breakout to new highs. But far more important than that initial breakout, it showed something far more significant. The stock showed that it can rise in price. In other words, I can see a prior uptrend. The stock proved that it cane move up in price. Like a new draft prospect in the major leagues. Can he bat? Can he pitch? Can he shoot? Can he defend? Can he get better as time passes? If he can prove that he gets better with time, then he is worth watching. It is no different with stocks. Palantir (PLTR) showed right off the bat that it can go higher in price. A prior uptrend is critical to most stock charts.

What else can you tell me? Think of it in terms of where the overall stock market was during this period from October 2020 to February 2021. If you were not active or not paying attention to the market back in those days or have even forgotten where we were, maybe you can wait till the end of this article to help you recall those days.

Palantir (PLTR) Stock Downtrend?

Now travel along Palantir (PLTR) stock for the next phase of its movement. From February 2021 to March 2023. Just watch it from left to right and pretend you are in a car driving up and down on its chart’s path from left to right as time passes from early 2021 to the middle of 2023. All the while that you are driving, which is mostly down with an occasional upward but short-lived move, I want you to pay attention to the volume. Not so much to the actual volume, but rather to the change in volume from prior weeks. How does that ride feel and look to you? I have marked each intermediate high with a white arrow, and each intermediate low with a red arrow. Once again, I want you to recall where the overall stock market was during this period. From around February 2021 to the fall of 2023. If you do not recall, no worries, I will synopsize everything towards the end of this article.

Palantir (PLTR) Stock Uptrend?

Now embark on the next phase of the move of Palantir (PLTR) stock. From August 2023 to the present, March 2024. Once again, using the same premise as before, imagining you are driving in a car along the price move of Palantir (PLTR) stock, what do you observe? Suppose I add another aspect that you need to add to your imaginary drive up on Palantir stock’s price movement. Suppose I say that whenever there is volume expansion that accompanies a price movement upward, pretend your car has a tailwind. Similarly, if there is a volume expansion when the price moves downward there is a tailwind again, but it is pushing your car downward. Now what do you see? Does the chart below depict the action on Palantir stock?

Is Palantir (PLTR) Stock A Good Buy?

I admitted early on in this article that I will observe and interpret only the obvious. If you observed what I did, you would then interpret what I did. And you would conclude what I do. Someone with deep pockets started to affect a price movement on the Palantir (PLTR) stock. This was sometime around May of 2023. But there was not much conviction in that action as the stock meandered between $14 (June 2023) and $ 21 (February 2024) until it broke out to higher prices. The real test is at reactions. Where will the next reaction low be? Where do you place a trailing stop?

Now pull back from the close-up and go back to the original all time weekly chart. And try and recall where the overall market has been when seen in conjunction with Palantir’s stock chart. I would like to say that Palantir began its IPO at the wrong time. Palantir stock came to the market just as the wild short-term upswing was about to end after the initial panic of covid had hit the market. In 2020, the general market took a wild dive in March. The recovery was quick and fast from April 2020 to spring of 2021. Palantir topped out in February 2021. After an initial fake attempt to regain its footing, Palantir started a long downward move all the way to below $7.00 a share. It has been the recent breakout in February that seemed to have some deep pockets behind it. But is this a set-up to trap the retail investor? And turn around and head back down? What if there is an external shock to the market? Or an internal shock to Palantir stock? Are these deep pockets setting the small people up? Or is this the real deal and the beginning of a real move?