Key Takeaways

• Palantir shares closed at a record high Wednesday for the second consecutive day, as a cooling of global trade tensions has restored risk appetite and investor enthusiasm for AI stocks. 

• The price consolidated within a pennant before breaking out above the pattern in Tuesday’s trading session, indicating a continuation of the stock’s longer-term uptrend.

• Bars pattern analysis forecasts a potential upside target of around $210 in a move that could play out until early- to mid-June.

• Investors should watch major support levels on Palantir's chart near $97 and $66.

Palantir Technologies (PLTR) shares hit another record high on Wednesday, as a cooling of global trade tensions has restored risk appetite and investor enthusiasm for AI stocks. 

The latest surge in the company's stock comes after the U.S. and China agreed Monday to slash their tariffs on one another for 90 days, with sentiment also receiving a boost earlier this week after Bank of America analysts called the AI analytics software provider a “market definer” for companies seeking to leverage artificial intelligence.

Palantir shares rose 1.6% on Wednesday to around $130, marking the second consecutive day that the AI favorite has hit all-time intraday and closing highs.

The stock had fallen 6% last week as the company’s higher-than-estimated earnings and outlook failed to meet investors’ lofty expectations. However, the stock has nearly doubled from last month’s low amid a rebound in the AI trade and expectations that the firm’s software could benefit from ongoing efforts to improve government efficiency.

Below, we break down the technicals on Palantir’s chart and identify major price levels that investors may be watching.

Pennant Pattern Breakout

After forming a piercing pattern early last month, Palantir shares have staged a sharp rally, climbing above the prominent February peak in the process. 

More recently, the price consolidated within a pennant before breaking out in Tuesday’s trading session, indicating a continuation of the stock’s longer-term uptrend.

Meanwhile, the relative strength index points to bullish momentum with a reading above the indicator’s neutral threshold, though it remains below overbought levels, providing ample room for further buying.

Let’s use technical analysis to forecast where the AI software provider’s stock may be headed next and also identify major support levels worth watching during potential retracements.

Bars Pattern Analysis

To forecast where the stock’s price may be headed next, investors can use bars pattern analysis, a technique that analyzes prior trends to predict future price movements.

When applying the analysis to Palantir’s chart, we extract the price bars comprising the stock’s trending move that immediately preceded the pennant and reposition them from the pattern’s breakout point. 

This projects an upside target of around $210 and indicates the move may play out until early to mid-June if the current trend higher replicates the prior trend analyzed.

Major Support Levels Worth Watching

During retracements, investors should pay close pay attention to the $97 level, currently situated just above the 50-day moving average (MA). The shares may encounter support in this area near the March peak, which closely aligns with brief period on consolidation that formed on the chart in mid-April.

Finally, selling below this major level could see Palantir shares test lower support around $66. Investors may seek entry points in this region near the close-by 200-day MA and a horizontal line that connects last month’s low with the notable January trough.

Source: TradingView.com.