For this week’s post, i have decided to do a comprehensive review of Palantir and with consideration of the overall climate.
With focus on the weekly view of the stock ,
As you can see –
1. The stock has just completed 3 black soldiers which is a sign of extreme bearishness since the last trading day on Friday.
2. The stock is nearing the strong support level of 21.11 . Historically when you compare the last reversal back in May 2021 at 17.10 . The stock price action tested all the way to the Fibonacci level of 78.6%. i am not discounting the probability that the stock may test the same Fibonacci level this time round – which would be 19.97
3. The price action has turn bearish . Note the lower highs and lower lows.
4. The overall macro climate is bearish for growth stocks 1) in general towards the end of July 2) with the bond asset tapering timeline playing out. Do refer to my post here and here for the bearish climate analysis.
For the reasons above, i have taken profit from Palantir and rebalance the stock from 25% to 2% of my entire portfolio. This is in line with my strategy of rebalancing of growth stocks and preparing a war chest for the upcoming market correction.