Palantir Technologies
stock was headed for more losses on Wednesday, after breaching a closely watched technical price level that could accelerate declines.
Palantir,
an analytics-software company, was on track for a third straight day of losses, with the stock last down 3.1% after the shares tumbled 9.2% on Monday and shed a further 0.5% on Tuesday. Pain for the stock has come after one analyst sounded the alarm over how data ownership concerns from customers—namely, the U.S. Army—could limit gains from future contracts. Palantir’s four-year, $458 million contract for the Army Data Platform is set to end within weeks.
Palantir’s head of global communications Lisa Gordon had told Barron’s Monday: “There is no data ownership conflict between Palantir and the Army, on Army Vantage or elsewhere. Palantir does not have or retain any ownership rights to customer data, across any of our Government or Commercial customers.”
With Palantir shares trading around $17.70, the stock has currently fallen below its 50-day moving average price—$17.74. The 50-day moving average is an important technical indicator that investors watch as a gauge of a stock’s medium-term performance. Falling below its 50-day moving average is a sign that Palantir stock is down in the dumps.
Technical analysis is not the be-all and end-all of markets—far from it. But, equally, traders pay attention to technical levels like the 50-day moving average and could be encouraged to sell Palantir stock in anticipation of further weakness after it fell through that mark.
Technicals may only exacerbate bearishness on the stock, which could be overextended after a 185% rise so far this year. The shares have an average rating of Hold among 20 analysts surveyed by FactSet, with a consensus target price on the stock—$16.03—implying downside of more than 12% from Tuesday levels.
Write to Jack Denton at jack.denton@barrons.com
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