Watch these Palantir price levels as stocks rise on S&P 500 inclusion

Key recommendations

• Palantir Technologies jumped in pre-market trading on Monday after news that the big data analytics software company will join the benchmark S&P 500 index, with the inclusion taking effect before the market opens on September 23.

• The stock temporarily broke below an ascending triangle last month, but immediately reversed above the top of the trend line to form a bear trap.

• Investors should monitor Palantir stock’s key aerial chart levels at $32.70 and $34.75, while watching for important pullback levels at $29 and $25.50.

Palantir Technologies ( PLTR ) (shares rose in premarket trading Monday after S&P Global announced late Friday that the big data analytics software company will join the benchmark S&P 500 index, with the inclusions taking effect before the market opens on Sept. 23.

The Denver-based company’s shares, which had nearly doubled in the past twelve months to Friday’s close, have been on investors’ radar as a possible contender to gain a coveted inclusion in the blue-chip index this year as an artificial intelligence (AI) software offerings continue to generate profits.

To join the S&P 500, a company must have reported a profit in its most recent quarter and have a cumulative profit for the past four quarters, requirements that the software maker easily meets after reporting a profit for the past seven quarters consecutive, with its last quarterly profit. representing the largest in its twenty-year history.

Palantir shares rose 7.8% to $32.69 about 90 minutes before the opening bell on Monday.

Below, we’ll take a closer look at what the technicals on Palantir’s chart are saying and highlight important price levels that investors should watch out for.

August Bear Trap

Shares of Palantir broke out of an ascending triangle in early July before temporarily falling below normal during the market’s broad selloff in early August.

However, the stock promptly recovered the top line of the triangle, climbing to a new multi-year high in the process. The move formed a bear trap, a chart pattern that entices investors to sell or enter short positions before the market recovers quickly.

Looking ahead, investors should monitor several key price levels on Palantir’s chart that are likely to attract attention.

Key general price levels to watch

The former is hovering around $32.70, roughly in line with Monday’s projected opening price. This area on the chart could provide resistance near a range of similar trading levels positioned around last month’s high.

A close above this level could see the stock make a move to the $34.75 region. We design this target using the measurement principle technique, which calculates the distance between the two ascending triangle trendlines in points and adds this amount to the upper trendline of the pattern. ($9.25 + $25.50 = $34.75).

The story continues

Retractable levels to watch

A pullback in the stock would likely encounter initial support near $29, a location on the chart where price finds a confluence of support from a horizontal line connecting a consolidation range around the July high to the 50-day moving average upslope (MA ).

Further weakness in the share price could lead to a retest of the key $25.50 level, where investors would likely look for entry points near the top line of the ascending triangle. Such a move would represent a 16% drop from Friday’s closing price.

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At the time of writing, the author does not own any of the above securities.

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