PLTR: Harmless pullback or reversal? How to tell the difference!
Hello traders and investors! Yes, PLTR hit the $ 27.45 as we said it would in our last study (the link to my previous idea is below this post), but what to do now?
The $ 27.45 is a secondary target in my view, but it is working very well as a resistance. Now we can expect some struggle around this area, and the fact that PLTR dropped below its 21 ema in the 1h chart reinforces this idea.
It is interesting to notice that it is dropping a lot, but the volume is not that good. This tells us that this is not a true bearish movement, just a harmless pullback.
This resistance is quite relevant in the daily chart, and today we have a Bearish Engulfing (so far). This might cause a pullback to the purple trendline or even to the 21 ema again.
This wouldn’t be surprising, and PLTR will still remain bullish. Remember: In a bull trend, we have higher highs/lows, but we do have lows. Sometimes, people get anxious when we are doing higher lows, and think it is the end of the world.
To identify a harmless pullback, just look at the volume: If it is dropping, with lower volume, than it is just a pullback. This follows the 5th tenet of Dow Theory: The volume must confirm the trend. If the volume doesn’t confirm the trend, we must be careful. If you see a bearish structure, like lower highs/lows, then we are talking about a reversal sign.
Today’s movement doesn’t change my target on PLTR, at $ 31.34, and since we bought around the $ 20, we are in a very comfortable situation.
If you liked this analysis, remember to follow me to keep in touch with my daily updates. Also, support this idea if it helped you!
Thank you very much!
The $ 27.45 is a secondary target in my view, but it is working very well as a resistance. Now we can expect some struggle around this area, and the fact that PLTR dropped below its 21 ema in the 1h chart reinforces this idea.
It is interesting to notice that it is dropping a lot, but the volume is not that good. This tells us that this is not a true bearish movement, just a harmless pullback.
This resistance is quite relevant in the daily chart, and today we have a Bearish Engulfing (so far). This might cause a pullback to the purple trendline or even to the 21 ema again.
This wouldn’t be surprising, and PLTR will still remain bullish. Remember: In a bull trend, we have higher highs/lows, but we do have lows. Sometimes, people get anxious when we are doing higher lows, and think it is the end of the world.
To identify a harmless pullback, just look at the volume: If it is dropping, with lower volume, than it is just a pullback. This follows the 5th tenet of Dow Theory: The volume must confirm the trend. If the volume doesn’t confirm the trend, we must be careful. If you see a bearish structure, like lower highs/lows, then we are talking about a reversal sign.
Today’s movement doesn’t change my target on PLTR, at $ 31.34, and since we bought around the $ 20, we are in a very comfortable situation.
If you liked this analysis, remember to follow me to keep in touch with my daily updates. Also, support this idea if it helped you!
Thank you very much!
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