By Palantir, the renowned analytics-software company, is encountering a possible continuation of losses as a crucial technical price level hangs in the balance. Should this level be breached, it may expedite the downward trend.
The stock is currently heading towards a third consecutive day of losses, with a 1.7% decline during premarket trading following Monday’s substantial 9.2% tumble and an additional 0.5% decrease on Tuesday. Analysts’ concerns regarding data ownership issues, specifically those raised by customers like the U.S. Army, have caused significant distress for the company’s stock. This worry stems from potential limitations in future contract gains. Palantir’s $458 million contract for the Army Data Platform, set to conclude within a few weeks, adds to this unease.
As the Palantir shares prepare to open near $17.90, there is a perilous possibility that the stock might fall below its 50-day moving average price, which stood at $17.66 at the market’s close on Tuesday. It is widely recognized that the 50-day moving average serves as an essential technical indicator utilized by investors to assess a stock’s medium-term performance. Therefore, dropping below this threshold signifies a considerable decline for Palantir stock.
While it is vital to acknowledge that technical analysis does not solely determine market trends, traders nonetheless pay close attention to significant technical levels such as the 50-day moving average. Should the stock fall below this benchmark, it could ignite a wave of selling as investors anticipate further weakness.
Technical factors may exacerbate the bearish sentiment surrounding Palantir’s stock, especially considering its staggering 185% increase this year alone. According to a survey conducted by FactSet, among 20 analysts, the stock holds an average rating of “Hold,” with a consensus target price of $16.03. This projection suggests a downside of more than 12% from Tuesday’s levels.
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