Palantir Technical Analysis: Riding the AI Wave Amid Valuation Concerns - can the bull run continue?

Introduction

Palantir Technologies Inc. (NYSE: PLTR) has been one of the most compelling and polarizing stories in the stock market over the past few years. The data analytics software firm, known for its work with government agencies and a rapidly expanding commercial client base, has seen its stock price surge to unprecedented heights. As of July 23, 2025, with the stock trading around $152, investors are at a critical juncture. The company's powerful narrative, centered on the explosive growth of artificial intelligence (AI), is pitted against mounting concerns about its lofty valuation. This report will provide a comprehensive technical analysis of Palantir's stock, examining its recent performance, key chart patterns, and indicator readings to offer a detailed perspective on its current standing and potential future trajectory.

The Unmistakable Bullish Trend

From a technical standpoint, Palantir's chart tells a story of remarkable strength and enduring bullish momentum. The stock has been in a powerful uptrend, particularly since early 2023, and this trend has only accelerated in 2025. The share price has climbed from relative obscurity to become a standout performer in the S&P 500, hitting all-time highs in recent trading sessions.

This sustained upward movement is a clear indication of strong buying pressure and positive investor sentiment. The stock has consistently found support at key moving averages, a classic sign of a healthy uptrend. The 50-day simple moving average (SMA), in particular, has acted as a reliable floor during pullbacks, and the stock is currently trading well above both its 50-day and 200-day SMAs, reinforcing the bullish long-term outlook.

Recent price action has seen the stock break out of an ascending triangle pattern, a bullish continuation pattern that suggests further upside potential. This breakout, which occurred in mid-July, was a significant technical event that likely attracted further buying interest.

Key Support and Resistance Levels

For traders and investors, identifying key support and resistance levels is crucial for risk management and identifying potential entry and exit points. For Palantir, the following levels are of particular importance:

• Resistance: Having recently broken out to new all-time highs, Palantir is in "blue-sky territory," meaning there are no historical resistance levels to act as a guide. The next psychological resistance levels will likely be at round numbers, such as $160, $175, and eventually $200. The price target derived from the recent ascending triangle breakout is around $195, which will be a key level to watch.

• Support: In the event of a pullback, the first major support level to watch is the top trendline of the previous ascending triangle pattern, which is around the $125 mark. This level is also in proximity to the 50-day SMA, making it a strong area of potential support. A more significant correction could see the stock retrace to the $107 level, which corresponds to a previous peak and a breakaway gap from earlier in the year.

Indicator Analysis: A Mixed Picture

A deeper dive into technical indicators provides a more nuanced view of Palantir's current situation.

• Relative Strength Index (RSI): The RSI, a momentum oscillator that measures the speed and change of price movements, has been in bullish territory for some time. However, it has recently flirted with overbought levels (typically above 70). While a high RSI is not a sell signal in itself, it does suggest that the stock may be due for a period of consolidation or a minor pullback. It's worth noting that in a strong uptrend, a stock can remain in overbought territory for an extended period.

• Volume: Trading volume has been generally supportive of the uptrend, with accumulation days (up days on higher volume) outnumbering distribution days (down days on higher volume). However, some analysts have noted a negative volume balance in the very short term, which could be an early warning sign of waning buying pressure.

• Analyst Ratings and Price Targets: Analyst opinions on Palantir are decidedly mixed, reflecting the broader bull vs. bear debate. While some firms have recently upgraded their ratings and price targets, citing the company's "stunning" momentum, others remain cautious due to the stock's high valuation. The average 12-month price target from analysts is around $107, which is significantly below the current trading price. This divergence between the technical picture and analyst consensus is a key point of consideration for investors.

The Fundamental Backdrop: The AI Revolution

It is impossible to analyze Palantir's stock from a purely technical perspective without acknowledging the powerful fundamental narrative that is driving its performance. The company is widely seen as a key beneficiary of the AI revolution, with its Gotham and Foundry platforms being adopted by a growing number of government and commercial clients.

Recent news has been overwhelmingly positive, with the company announcing major contract wins and strong revenue growth. Palantir's upcoming earnings report on August 4th is a major catalyst on the horizon. Another strong report could provide the fuel for the next leg up in the stock price, while any disappointment could trigger a significant correction.

Conclusion: A High-Stakes Balancing Act

Palantir's stock is currently in a fascinating position. The technical picture is overwhelmingly bullish, with a strong uptrend, a recent bullish breakout, and supportive moving averages. However, the stock's valuation is a major headwind, and some indicators are flashing cautionary signals.

For now, the bulls remain firmly in control, and the path of least resistance appears to be higher. However, investors should be mindful of the risks. The stock is priced for perfection, and any stumbles could be severely punished. The key to navigating Palantir's stock in the current environment is to respect the trend while also being prepared for volatility. The upcoming earnings report will be a pivotal moment for the company and its shareholders, and it will likely set the tone for the stock's performance for the remainder of the year.

For the latest analyst ratings and price targets, see here