Market Overview

PreMarket Prep Stock Of The Day: Palantir Technologies

PreMarket Prep Stock Of The Day: Palantir Technologies

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

IPOs can be a tricky investment. On some occasions, if you do not pay up and get in early, you end up missing out or waiting for a retreat. On other occasions, by making an early purchase, you end up buying the top, as in the case of Lyft Inc. (NASDAQ: LYFT). 

The other strategy is to sit out the early action and wait for an entry point based on early technical analysis the issue offers, or wait for a catalyst. That happens to be set-up in shares of Palantir Inc. (NYSE: PLTR), which is Friday's PreMarket Prep Stock Of The Day.

What You Need To Know About Palantir: Palantir 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.

Early Palantir Price Action: The company made its debut on Wall Street Sept. 30 and traded in a range of $9.11 to $11.42, ending the session at $9.50.

A few days later, Palantir undercut the initial low but found a large group of investors who put in place a triple bottom from $8.90-$8.94 on Oct. 2, 5 and 6.

It was able to distance itself from that area Oct. 6, rallying from $9.03 to $9.90 on no specific news. In a choppy fashion, Palantir worked its way higher to end Wednesday's session at $10.72.

During that period, it did not breach the triple bottom put in place, nor was it able to pierce its opening day high.

Palantir's Tuesday News Not A Catalyst: Midday on Tuesday, Palantir announced it was in talks with the United Kingdom over a COVID-19 test-and-trace program.

The issue did not move on the news and ended the session pennies in the red at $10.50. It staged a modest rally on Wednesday, climbing to $10.72.screenshot_2020-11-06_at_12.04.24_pm.png

Momentum Traders Jump On Board: On Thursday, the issue made it on the radar of momentum traders.

After a slightly higher open, Palantir had only a nickel retreat to $10.85 and forged its way through a series of multiple highs at that $11 level, catching the attention of momentum buyers.

Later in the day, Palantir proceeded to breach its opening day all-time-high ($11.42), which may have attracted a large group of investors who employ a simple strategy for IPOs.

That strategy is going long an issue once it breaches its initial all-time-high.

The second way of buying took the issue all the way to $12.13, before falling back to end the session at $11.88. The strong up move took place on over two times the stock's 20-day average volume.

All Systems Go For Palantir: After a higher open Friday, Palantir had a brief retreat, but found buyers ahead of Thursday’s close at $12.05 and exploded to the upside.

As of 11:30 a.m., it had rallied all the way to $14.96 and backed off to the middle $14 handle.

It has already eclipsed Thursday’s huge volume (48.56 million), with 55.5 million shares traded with over four hours left in the session.

Palantir shares were up 18.77% at $14.11 at last check. 

Palantir Moving Forward: When an issue enters rocket ship mode, it is impossible to determine when it will end.

Investors with predetermined exit points should stick with their original plan or use a protective top to protect profits.

For those who prefer a wait-and-see approach, it may be prudent to wait for a consolidation period and use the parameters set forth by a trading range to determine its next move.

Photo courtesy of Palantir. 


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