Palantir Technologies, Inc PLTR gapped down almost 15% to start the trading day on Monday after printing mixed second-quarter financial results.
The American data analytics company reported quarterly revenues of $473 million, which came in ahead of the $471.34 million consensus estimate. Palantir reported a loss of 1 cent per share, which missed the estimate for earnings of 3 cents per share.
The company also issued weak guidance, advising it expects revenues for the third quarter to come in between $474 million and $475, far below the $506.88 million estimate.
Although the gap down was relatively large, Palantir didn’t negate the uptrend it began trading in on June 13 and as of press time, bulls appeared to be buying Monday’s dip.
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The Palantir Chart: Palantir’s most recent confirmed higher low in its uptrend was formed on July 26 at $9.38 and the most recent higher high was printed at the $11.62 mark on Friday. When Palantir hit its low-of-day on Monday, the stock remained above the most recent higher low, which kept the uptrend intact.
- A pullback was likely to come regardless of the reaction to Palantir’s earnings print because on Friday, Palantir’s relative strength index (RSI) was measuring in at 68%. When a stock’s RSI nears or reaches the 70% level, it becomes overbought, which can be a sell signal for technical traders.
- Prior to Monday, Palantir had been trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, which was bullish. The gap down caused the stock to fall under both EMAs and bullish traders will want to see the eight-day EMA regained quickly.
- Palantir’s dip was being bought on higher-than-average volume, which indicates the bulls are trying to regain control. At press time, about 67 million Palantir shares had exchanged hands, compared to the 10-day average of 32.22 million.
- Palantir has resistance above at $10.99 and $13.19 and support below at $9.79 and $8.92.
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