Few shares seize the creativeness of merchants like Palantir (PLTR). After a staggering run — up practically 400% previously 12 months — the unreal intelligence (AI) software program inventory has just lately pulled again sharply, correcting by 20% from its mid-August highs.
Now, the massive query on each investor’s thoughts is whether or not it’s too late to purchase PLTR – or if this AI protection inventory might nonetheless be a long-term 10-bagger.
In a latest stay webinar on momentum buying and selling, John Rowland, CMT, posed this precise query to Jim Van Meerten, the writer of Barchart’s well-liked Chart of the Day e-newsletter and creator of Barchart’s go-to chart templates.
Right here’s how Jim & John analyzed the PLTR technical setup as of Aug. 13, proper across the time shares had been peaking:
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RSI (Relative Power Index): Palantir was firmly in overbought territory — although that’s not routinely a promote sign by itself.
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Bollinger Bands: Palantir was using exterior the bands, however widening bands present robust continuation. Nonetheless, it’s not essentially a degree the place new cash desires to come back speeding in.
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MACD: Supported the bullish momentum, although stretched.
Beneath is a have a look at PLTR as of right this moment. The inventory has corrected its overbought situation, primarily based on the RSI round 39. Plus, shares are usually not solely again inside their Bollinger Bands, they’re additionally pinned under the central 20-day shifting common. If this correction is much like the one PLTR skilled in March, the present MACD studying suggests bearish momentum may very well be exhausted quickly.
Jim makes an essential level: 10-baggers don’t occur in a 12 months; they’re constructed over three to 5 years. Regardless of the sharp rally and high-volatility pullback, Palantir should still have room to maintain rising exponentially from right here.
That doesn’t imply “blindly maintain.” As an alternative:
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Use stop-losses primarily based in your private danger tolerance (“your tolerance for ache”).
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Look ahead to technical indicators like a Bollinger Band reversion or a MACD reversal earlier than including publicity (or panic promoting).
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Acknowledge that after such a run, “new cash might not need to chase” — however long-term holders can nonetheless profit if PLTR retains its trajectory.