Market Response to NATO Deal

Shares of Palantir Technologies (PLTR) experienced a nearly 5% increase in value on Monday, building upon a recovery trend that began the previous week. This surge follows the announcement that NATO has acquired the company’s AI-enabled military analytics system.

This agreement with NATO alleviates some concerns among investors, particularly regarding potential reductions in European reliance on American defense suppliers like Palantir. The backdrop of uncertainty around trade policies, particularly following the recent introduction of “reciprocal” tariffs by the Trump administration, has only heightened these concerns, although these tariffs have currently been put on hold.

Since the start of the year, Palantir’s stock has appreciated by 22%; however, it has also seen a decline of approximately 25% from its peak mid-February due to uncertainties regarding military expenditure and governmental efficiency initiatives.

Technical Analysis: Engulfing Pattern

After experiencing a significant drop of 47% from its all-time high set earlier in the year, Palantir’s stock recently formed a bullish engulfing pattern. This development indicates a potential shift in market sentiment, suggesting a renewed interest from investors.

The bullish engulfing pattern coincided with a rise in the relative strength index (RSI), moving above the crucial threshold of 50, which has historically acted as a pivotal point during previous uptrends for the stock.

Key Price Levels to Monitor

Overhead Resistance Levels

Palantir’s stock closed at $92.62 on Monday, indicating a potential for further increases. The immediate resistance level of interest is around $121, which aligns closely with the stock’s all-time high. This level may attract investors looking to capitalize on profits.

Should the stock surpass its all-time high, it could enter a price discovery phase, potentially reaching $300. This projection is based on a pattern analysis that considers previous price movements from last August to February and superimposes it on the stock’s recent low.

Support Levels to Watch

Investors should also keep a close eye on the $66 mark during any retracement periods. This level has shown resilience, with bulls likely ready to defend it as it corresponds to recent lows and other significant price points stretching back to early November.

If the price falls below $66, it may revisit lower support levels such as $45. This potential decline would represent a crucial area of interest for investors seeking entry opportunities, particularly considering it is near a period of consolidation that preceded last year’s rally post-election.