Watch These Palantir Price Levels as Stock Continues Retreat From Record High

Palantir (PLTR) shares slid Wednesday to log their sixth straight day of declines, after a short seller raised concerns about the stock’s elevated valuation.

The stock lost 1% to finish Wednesday’s session around $156, roughly 16% off their record close last Tuesday. At one point during Wednesday session, the stock dropped nearly 10% to $142, almost 24% from last week’s highs.

Short seller Andrew Left of Citron Research, who expressed concerns about the stock’s valuation in a Fox Business interview last week, said in a report Monday that he believes the stock has become “detached from fundamentals” and should be worth closer to $40.

While Wall Street analysts have applauded the data analytics software maker’s record revenue growth fueled by robust demand for its AI-powered platform, there is growing consensus that it’s fully priced into the shares. Even after their steep pullback, Palantir shares have more than doubled in value this year.

Below, we take a closer look at Palantir’s chart and apply technical analysis to identify crucial price levels worth watching out for.

Relative Strength Index Falls Into Bearish Territory

After hitting an all-time high just last week, Palantir shares have continued to retrace toward the 50-day moving average (MA), with selling intensifying in Tuesday’s trading session. Moreover, the move lower coincided with the relative strength index (RSI) falling into bearish territory, signaling an acceleration in selling momentum.

It’s also worth pointing out that Tuesday’s decline occurred on the highest trading volume since late June, indicating larger market participants drove the sell-off.

Let’s identify three crucial support levels to watch on Palantir’s chart if the shares continue to fall and also point out a key overhead area worth monitoring during possible upswings.

Support Levels to Watch

The first support level to watch sits around $148. A pullback to this level could attract buying interest near the late June peak and a period of sideways drift during the second half of July. This location lies in the same neighborhood as a bars pattern downside target that takes a prior retracement to the 50-day MA and repositions it from this month’s high. That move also started with five consecutive down days.

A close below this crucial level could see the shares test lower support around $125. Investors may seek entry points in this area near the prominent February peak and a series of corresponding trading activity on the chart between May and June.

Further selling could spark a deeper correction in the shares to the $98 level. This region on the chart may provide support near the March countertrend peak, which also closely aligns with a retest of the 50-day MA in mid April.

Key Overhead Area Worth Monitoring

During upswings in the stock, investors could monitor how the price responds to the $188 area. Investors who have bought Palantir’s recent dip could decide to lock in profits near price action situated just below the stock’s record high.

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As of the date this article was written, the author does not own any of the above securities.