Palantir (PLTR) shares are likely to remain in focus after jumping Tuesday following news that the analytics software provider's entire product suite has received approval for use in processing sensitive federal workloads, positioning the firm to provide an array of services to government entities.

Sentiment for the stock may have also received a boost after Barron’s reported that the software maker remains a top contender to join the 澳洲幸运5官方开奖结果体彩网:Nasdaq 100 when the tech-heavy index undergoes its annual reconstitution after the company transferred the listing of its Class A common stock to the Nasdaq from the 澳洲幸运5官方开奖结果体彩网:New York Stock Exchange (NYSE) last month.

Palantir shares gained nearly 7% to close Tuesday at just under $71, after hitting a record high of $71.37 during the session. The stock has surged more than four-fold since the start of the year amid growing demand for the firm’s customizable 澳洲幸运5官方开奖结果体彩网:artificial intelligence (AI) software solutions.

Below, we break down the 澳洲幸运5官方开奖结果体彩网:technicals on Palantir’s chart and point out important price levels worth watchin🦩g out for.

Continuation Move

Since breaking out from a textbook pennant last week, Palantir shares have continued to trend higher, with gains accelerating following Tuesday’s newsꦐ.

Importantly, the move occurred on the highest 澳洲幸运5官方开奖结果体彩网:trading volume since m♛id-November, indicating buying conviction from larger market participants.

While the 澳洲幸运5官方开奖结果体彩网:relative strength index (RSI) confirms bullish price momentum above the 70 threshold, the indicator also flashes 澳洲幸运5官方开奖结果体彩网:overbought conditio♋ns that could lead to short-term profit-taking.

Let’s apply technical analysis to project how the stock’s current 澳洲幸运5官方开奖结果体彩网:continuation move may play out and also identify three key 澳洲幸运5官方开奖结果体彩网:support levels that investors will likely be watching.

Upside Price Target to Monitor

To forecast a potential upside target, investors can use the 澳洲幸运5官方开奖结果体彩网:measuring principle, a chart-based technique that analyzes prior price moves💙 to project future projections.

When applying the tool to Palantir’s chart, we measure the distance of the impulsive trend that preceded the pennant in points and add that amount to the pattern’s upper trendline. For example, we add $25 to $64, which projects a 澳洲幸运5官方开奖结果体彩网:price target of $89.

Key Support Levels to Watch

Upon an initial 澳洲幸运5官方开奖结果体彩网:retracement, investors should watch the $58.50 level, a location about 18% below the stock’s ꧑current price💟 where the shares may encounter support near the low of the pennant pattern.

A close below this level could lead to a reversal down to around $45. Investors may look for buying opportunities in this area near two prior peaks that formed on the chart during October before the stock’s early-November 澳洲幸运5官方开奖结果体彩网:breakaway gap higher.

Finally, a deeper 澳洲幸运5官方开奖结果体彩网:correction may see Palantir shares fall to lower support at the $38 level. This region could attract buying interest near the top trendline of a 澳洲幸运5官方开奖结果体彩网:consolidation period that formed on ꦓthe chart between late September and early October.

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As of the date this article was written, the author does not own any of the above securities.