The Palantir stock price is clinging to its long-term uptrend. But with its billionaire co-founder under fire, can PLTR recover?
Depending on who you ask, Palantir Technilogies Inc (NYSE: PLTR) is either a steal at the current price or 50% overvalued.
The Palantir stock price finished yesterday’s session at $22.13, higher by $0.11 (o.50%).
PLTR certainly divides investors. Its huge popularity amongst retail traders is clear. After ist NYSE listing in September 2020, Palantir Technologies enjoyed an almost one-way ride to $45.00. However, after setting that record in January, the stock has trended broadly lower in often volatile conditions.
On the 10th of May, PLTR reached a new low for 2021, with the stock changing hands at $17.06. However, just over a month later, Palantir stock was around 62% higher at $27.20.
Although, PLTR has seriously underperformed in July and is currently 19% below mays peak.
This is, in some part, due to criticism aimed at the big-data firm’s co-founders.
A lawsuit brought by investors claims Billionaire Chairman Peter Thiel, CEO Alex Karp, and President Stephen Cohen’s 49.99% decision making power is unfair. Furthermore, the plaintiffs suggest the trio’s flexible “Class-F stock” effectively makes them “Emperor’s for life”.
Of course, legendary venture capitalist Thiel dismissed the claims. Furthermore, a quick scroll through Reddit uncovers many retail traders favouring Thiel, Karp, and Cohen as the deciding factor in the firms’ future.
However, an article published yesterday by the ‘Bears of Wall Street’ paints a gloomy picture of the Palantir stock price.
Our analysis shows that Palantir’s fair value is $8.22 per share, which represents a downside of over 60% from the current market price.
The dilution risk and the continuous selling pressure are likely going to prevent the appreciation of Palantir’s stock anytime soon.
As I wrote in my report on the 13th, despite the polarizing views and the erratic price action, the stock has a habit of finding its way back to around this level:
Whichever scenario, if any, plays out, I would not discount PLTR finding its way back to $23.000 once again.
However, the technicals suggest a move that would take the price far from $23.00, could soon be on the cards.
The 4-hour charts show the Palantir stock price is testing its long-term uptrend at $21.30. Additionally, PLTR is below the 50, 100 and 200-period moving averages, which exert downside price pressure.
The price did bounce from the trend support on the 19th. However, the 9% rebound was unconvincing and soon faded.
Furthermore, trading volumes are failing, and this should be considered a negative factor.
Although the Relative Strength Index is turning higher.
A convincing break below the trend line will target the may $17.06 low, around 24% below the latest price.
On the other hand, should PLTR climb above $23.93, it will have reclaimed the tightly-bunched moving averages. And in that event, the horizontal support at $27.50 looks likely.
Follow Elliott on Twitter.
