Palantir: Steep downhill!

Difficult times for Palantir shareholders. The share is coming under pressure again at the start of the week, currently losing around eleven percent of its value. The stock is suffering from reports that the USA wants to reduce defense spending. In addition, Palantir CEO Alex Karp wants to sell shares worth around 1.2 billion dollars.

Opinions on Wall Street are divided as to whether and to what extent Palantir will be affected by cuts in the US defense budget. Daniel Ives of Wedbush does not see Donald Trump's plans to cut defense spending as necessarily negative for Palantir. He even believes that Palantir could receive more IT budget from the Pentagon. Louie DiPalma of William Blair, on the other hand, sees a significant risk that sales from business with the US could slow down and the stock could come under further pressure.

Of course, given the parabolic movement that Palantir shares have recently shown, a correction - even a somewhat more significant correction - is anything but unusual. The stock has simply overheated. The problem with such parabolic movements as Palantir's is that there is not a huge amount of support on the way down. However, the area between 76 and 82 dollars, the highs from December last year, could serve as support. Below that, the January low of 65 dollars would be a good support before the 60 dollar area would come into investors' sights.