Stock

Palantir may have bottomed at $10. What should you do?

Palantir Technologies Inc. (NYSE:PLTR) stock has been under downward pressure since November 2021. A series of downgrades by analysts saw the stock touch a bottom of $10 in February this year, down from a high of $26 in early November last year.

Commenting on a downgrade in November last year, RBC analyst Rishi Jaluria said that Palantir got significant boosts from Covid-19, which is now fading. The analyst also said that Palantir’s revenues from SPAC investments were not sustainable.

Another reason for the downgrade was a slowdown in both government and commercial businesses, which drove Palantir’s revenue. Whereas the analyst lowered the price to $19 from $26, the decline was greater than expected, with the stock falling to $10.

Fast forward, in early March, Palantir stock started surging after Morgan Stanley upgraded the stock to equal weight from underweight. The analysts still lowered the price target from $24 to $16.

At the current trading of $12.94, Palantir is showing renewed hope. Optimism has also been boosted by expectations of increased defense spending following the Ukrainian war. But should you snap the stock now?

Palantir escaping from the $10 bottom

Source – TradingView

Technically, Palantir stock is trading slightly above the support zone of $10. The price broke above a descending trendline and is looking to go higher following an improved sentiment.

It should be noted that at the $10 bottom, Palantir was trading in an oversold region, which could partially explain the recent jump. The 50-day moving average has also joined support, indicating a building bullish momentum.

Concluding thoughts

We believe Palantir stock will go higher after bottoming at $10. However, the stock could slide back to the 50-day MA which coincides with the $12 price. Thus, investors should consider adding the stock on a retracement to the level. The targets are at $16 and $18.

The post Palantir may have bottomed at $10. What should you do? appeared first on Invezz.

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