Palantir Hits All Time Highs. More Upside Available?
Palantir just hit new all time highs after reaching all time highs on Tuesday this week post earnings, reaching over 108.50 today. Since the earnings (which shot the stock above $100) the ticker has consolidated on Tues/Weds, but today it ripped impulsively printing new all time highs today.
The thoughts on traders minds now are “Does it have more upside”?
We’ll answer this question using our PFP system to see where it can go from here and how you can trade it.
Options Positioning in $LLY
Looking at the option positioning, the TCS (top call strike) is at 110, but there is some decent fuel for the Feb/Mar op-ex targeting 120. The bulk of the bullish positioning is between 100-110, but there is a vacuum between 110-115. If we clear above 110, we could get a quick impulsive move to 115, and a close there puts 120 on notice.
We prefer pullbacks to 105/100 zone as the call gamma there is very thick, but in our view, there is ‘scope’ for a move higher, however unless we have new scaffolding built above 105, we like the pullback zone listed above.
Option Flows for $LLY
In terms of the options flow today, its been bulls on parade with strong amounts of call buying (positive deltas) and a decent chunk of put selling (also positive deltas). While we’re not at 30 day highs for + notional deltas, we’re almost ½ way there (~300M in +notional deltas).
So, from a flow based perspective, its been all bullish on the options front with a little bit of flat call buying near the ITD (intraday) highs. We’re not sure $PLTR can produce this back to back days, thus we’re leaning for a small pullback towards 105 near term.
Price Action in $PLTR
Looking at the price action on the 5 min chart below, we can see the big surge after market on Monday followed by a two session corrective structure since. Today we broke out via an impulsive move, so the ICI structure from our TTM course is playing out as expected.
5 minute chart $PLTR
The TGS is around the base of the corrective structure, so corrective pullbacks from here should find support between 100-105. Overall, the price action context favors more upside as long as 100 holds.
How We’re Trading $PLTR
We’re looking for corrective pullbacks into the 100-105 zone, and if the PFP (positioning, flows and price action) looks good when we get there, we’ll take a bullish position, likely for the Feb op-ex. We’ll probably split our targets and use either long calls, bull call spreads or call BWB’s to trade Palantir.
We’ll share our live trade ideas in real time with our members of the Benzinga Option School or Trading Waves, so make sure to join and see how I’m trading it. I hope to see you there soon.