PreMarket Prep Stock Of The Day: Palantir

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.

There are loved stocks, some stocks that get even more love, and then there is Palantir Technologies Inc. PLTR.

The Company: 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.

Mysterious Price Action Off IPO: In what is rare for an IPO, especially with the hype surrounding this one, the price action was muted in the initial month following its debut on Sept. 30.

The range for its first day of trading after opening at $10 was from $9.11 to $11.42, with a close of $9.50. Over the next month, it only expanded the low by a small margin as its all-time low stands $8.90. On the upside, the top of the range was not breached until Nov. 5, and the rest is history.

Breakout: After ending its Nov. 4 session at $10.72, it breached the IPO initial high ($11.42), rallying to $12.13 and fell back to end the session above the breakout price at $11.88,

For investors that did not strike on that day, they have never had the chance as the lowest it reached was the following day, when it bottomed at $12.05 and never looked back. On the breakout day, it rallied to $14.96 and retreated to end the session at $13.83.

Here Comes Cathie: While the issue was doing fine on its own accord, Cathie Wood of Ark Investments added fuel to the fire. On Nov. 13, it was disclosed that Wood had added over 1 million shares of the issue to her Ark Next Generation ETF ARKW. The news had a modest impact on the issue on the following Monday (higher by $0.13 to $15.93) but had a major impact the next day as it rallied to $17.85.

On The Lookout For A Top: Following quick bursts on the upside along with periods of consolidation, the issue exploded during a four-day stretch in late January. In four trading sessions, it rallied from $25.98 to its all-time high ($45) and all-time closing high ($39) on Jan. 27.

Profit-Taking Into Q4 Report: Ahead of its earnings report, the issue went into retreat mode as investors were locking in profits. As a result, the issue skidded to $31.91 the day ahead of the report. The beat for EPS and revenue was not good enough and the issue swooned to $27.84 on Feb. 16.

Backing And Filling: Despite several large additional purchases by Wood, the issue did not find a post-earnings bottom until last week at $20.86. It rebounded from that low to end the week at $23.07.

The Catalyst: Before today's open, the company announced it was selected by the National Nuclear Security Administration for a 5-year, $89.9 million contract for SAFER project. After such a prolonged retreat from its high, the news is exactly what bulls were looking for.

Market Structure Edge Bullish: During Monday’s broadcast, special guest Tim Quat of Market Structure detailed his bullish thesis on the issue.

Not Great Price Action: After a higher open, it had a brief retreat to $23.50 and resumed its move higher. As of 2: 30 p.m. ET, the rally has stalled at $24.45 and the issue is fallen to make a new low for the day at $23.34. The current high comes in between its March 22 ($24.92) and March 23 highs ($24.11).