Palantir Surges Following Cathie Wood Buy, Break From Bull Flag: Here's How To Play The Run Higher

Palantir Technologies, Inc PLTR was surging almost 14% higher on Thursday after an 8.25% rally on Wednesday garnered interest from investors.

The momentum is partially due to a report that Cathie Wood's Ark Invest on Wednesday added 1.26 million shares of the company, a purchase valued at about $13 million. Fom a technical standpoint, Palantir is breaking up from a bull flag pattern.

The bull flag pattern is created with a sharp rise higher forming the pole, which is then followed by a consolidation pattern that brings the stock lower between a channel with parallel lines or into a tightening triangle pattern.

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The Palantir Chart: Palantir’s bull flag was printed between May 4 and Tuesday, with the pole formed over the first five days of that time frame and the flag formed over the trading days that followed. On Wednesday, Palantir broke up from the flag formation and on Thursday, the stock was spiking higher.

• The measured move of the bull flag is about 41%, which suggests Palantir could surge up toward $13 in the future, although periods of consolidation may take place beforehand. If Palantir closes the trading day near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate that another gap up and higher prices will take place on Friday.
• If Palantir gaps up again and closes near the high-of-day on Friday, a three-gap-up-reversal pattern will form, which may indicate the local top is in and a reversal downward will take place. The second most likely scenario is that Palantir trades sideways and prints an inside bar pattern Friday, which would help to lower the stock’s relative strength index.
• Palantir has resistance above at $13.18 and $14.58 and support below at $10.99 and $9.79.

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