Here's My Plan for Palantir Amid the Stock's 'Nine Day Battle'

Time to update Palantir Technologies PLTR already? Believe it or not, it's been two whole weeks since I publicly updated my take on Palantir, and the requests have been coming in via email. So, by popular demand, and because there actually has been some technical development, let's take a look and see what we can see.

As readers may recall, Palantir published second-quarter financial results on Aug. 4, almost a month ago. The company beat Wall Street's expectations for revenue generation, topping the $1 billion mark for the first quarter in its history, while also besting consensus for both adjusted and unadjusted earnings per share. Palantir also took current quarter and full-year sales guidance well beyond what Wall Street had been looking for.

Palantir will not report the current quarter until early November, so we have some time. Right now, Wall Street is looking for an adjusted earnings per share of $0.17 (or an unadjusted EPS of $0.11) on revenue of about $1.1 billion. This would compare well to the year adjusted comp of $0.10, while reflecting year-over-year sales growth of close to 51%. This would be an acceleration from 48% annual growth for the prior quarter.

The Nine Day Battle​​

I want readers to take note of this stock's now nine-day long battle at its 50-day simple moving average. This, to me, shows that professional money has been defending the stock. Note the "Hammer Doji" created back on Aug. 20. That's key, because the line was pierced and then there was a sharp upward reversal prior to that day's close that got the share price back to the thin blue line we are discussing.

A loss of that line that is not quickly regained would result in all of this capital that has been added here, having to be reduced. That would likely be painful. Conversely, one might say that the longer the pros put up this fight the sooner the profit-takers will run out of ammo.

The indicators are not in great shape. Relative Strength is below neutral and has been for about three weeks. The daily Moving Average Convergence Divergence is still set up quite bearishly. That said, the histogram of the 9-day exponential moving average is moving toward the zero-bound and the 12-day EMA, which is still in decline, is showing signs of curling towards the 26-day EMA. A crossover there would provoke some bullish algorithmic action.

My Thoughts

I took some profits up higher due to a redemption at my operation. I explained that already. It was not due to some great foresight on my behalf. I have added some of those shares back on at the 50-day line, but not all. I am saving some dry powder in case the line does crack. This is still the stock that is the future of AI in my opinion and is still the stock that I said I was buying for my children and their families on Liz Claman's show on Fox Business when it was trading at a fraction of where it is now. My views on Alex Karp and his team have not changed one bit.

My Continuing Plan for Palantir

Target Price: $205 (reiteration) 

Pivot: $190 (recent high) 

Add: 50-day EMA (right here down to the bottom trendline of our Regression model)

Panic: Loss of 200-day SMA (currently $110)

At the time of publication, Guilfoyle was long PLTR equity.