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Palantir Treks North Following Break Of Bull Flag: Where To Watch For The Pullback

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The Palantir Technologies logo is displayed on a shipping container at the companys booth during the Consumer Electronics Show (CES) in Las Vegas, Nevada on January 5, 2023. PATRICK T. FALLON/BENZINGA

Palantir Technologies, Inc (NYSE: PLTR) was trading up into the $13 range again on Thursday, which Benzinga pointed out was likely to happen when the stock broke up from a bull flag on May 17.

Palantir has partnered with war-torn Ukraine for defense and reconstruction in the wake of the invasion from Russia, announcing on Twitter that its software would be”used to support the reconstruction of the country in the wake of the Russian invasion.”

The Palantir Technologies logo is displayed at the company’s booth during the Consumer Electronics Show (CES) in Las Vegas, Nevada, on January 5, 2023. PATRICK T. FALLON/BENZINGA

Cathie Wood’s asset management firm Ark Invest has been purchasing shares since the company printed better-than-expected quarterly earnings on May 8.

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As Palantir has surged higher, the stock has stalled for brief periods of consolidation and on Wednesday, Palantir settled into an inside bar pattern.

An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). 

The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. 

The subsequent candle(s) must be completely inside the range of the mother bar and each is called an “inside bar.”

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

““Not all of it is a misunderstanding. Many of the people who don’t like us completely understand what we stand for, the West winning, strong defense, deterrence, competence, money well spent, no waste,” Palantir CEO Alex Karp said in a statement about company’s investment in Ukraine.

DNIPRO, UKRAINE – MAY 26: Firefighters extinguish a fire in a hospital building hit by a Russian missile on May 26, 2023 in Dnipro, Ukraine. (Photo by Yurii Tynnyi/Suspilne Ukraine/JSC “UA:PBC”/Global Images Ukraine via Getty Images)

Palantir’s inside bar leans bullish, because the stock was trading higher before forming the pattern and on Thursday, Palantir was surging up near Tuesday’s high-of-day. 

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Eventually, a longer-term period of consolidation is likely to drop the stock’s relative strength index RSI back down under the 70% level.

Bearish traders can watch for Palantir to print a bearish reversal candlestick, such as a doji or shooting star candlestick, to indicate the local top has occurred. 

Bullish traders who aren’t already in a position may choose to practice patience and wait for a more significant pullback before finding an entry.

Palantir has resistance above at $13.18 and $14.58 and support below at $10.99 and $9.79.

Produced in association with Benzinga

Edited by Alberto Arellano and Sterling Creighton Beard

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