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It has been a wacky year for the markets as a whole, and the IPO market has followed suit with some big winners and losers and wild price action.
One of the more recent ones, Palantir Technologies Inc PLTR was on the move in Friday’s session and is the PreMarket Prep Stock of the Day.
About Palantir: Palantir Technologies provides organizations with solutions to manage large disparate data sets in an attempt to gain insight and drive operational outcomes.
Founded in 2003, Palantir released its Gotham software platform in 2008, which focuses on the government intelligence and defense sectors.
Palantir expanded into various commercial markets with its Foundry software platform in 2016 with the intent of becoming the data operating system for companies and industries.
Palantir Rangebound At First: On its first day of trading, Palantir had a range from $9,11 to $11.42 and ended the session at $9.50. Over the next 25 sessions, it expanded the bottom range, but not by much — it put in a trio of lows just under $9, with the ultimate low being $8.90.
The closest Palantir got to the top of the range was on Oct. 27, when it reached $11.04.
Palantir's Breakout: A popular IPO strategy is to observe the early action in an issue and wait until it breaches its initial high to attempt a long.
In this instance, it worked well. After ending its Nov. 4 session at $10.72, Palantir breached the initial high of $11.42, rallying to $12.13 and falling back to end the session above the breakout price at $11.88.
For investors who did not strike on that day, they never had the chance, as the lowest Palantir reached was the following day, when it bottomed at $12.05 and never looked back.
Palantir's Follow-Though, Consolidation, Catalyst: Over the next days, the issue worked its way up to the $16 area and maintained that level until it was provided with a catalyst to make another mover higher.
On Nov. 17, it was disclosed that well-known investor Cathie Wood had added over 1 million shares of the issue to her Ark Next Generation ETF ARKW. On that day, the issue leaped from $15.93 to $17.85 on much heavier-than-average volume.
Momentum Traders Take Over: With the vote of confidence from Wood, momentum and algorithmic traders piled into the issue.
As a result, it was higher in five of the next six trading sessions, with the outlier being a small decline of 83 cents on Nov. 20,
Over this course of time, the issue rallied to $29.75 on Wednesday, before falling back to end the session at $29.05.
Negative Palantir Catalyst: The issue was in full rocket ship mode early in Friday's session, moving up from Wednesday's close ($29.05) to $33.50 before Andrew Left of Citron Research announce a short in the issue and called it a “full casino.”
What a run the past month for all. But as traders looking for short exposure, $PLTR is no longer a stock but a full casino. Does not take a ball of crystal to know this will fall back to Arda. Shorting with a $20 2020 target— Citron Research (@CitronResearch) November 27, 2020
As expected, his tweet instigated a barrage of selling in the issue. As of 11:30 a.m., the issue had been under selling pressure and breached its all-time closing high price from Wednesday ($29.05).
The stock ended Friday's holiday-shortened session down 4.78% at $27.66.
Palantir Moving Forward: Over the years, Left’s predictions have come to fruition and other times they have not.
Therefore, it is impossible to determine if the issue will decline to his price target of $20. Instead, investors who are long the issue should abide by their original trading plan and exit at their proposed target on the upside or attempt to lock in profits with a protective stop on the downside.
For now, the importance of Wednesday’s all-time closing high price was emphasized in Friday's’s session.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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