Palantir Stock Could Continue Rally After Breakout

Reasons why we recommended a PLTR call option

Aug 23, 2024 at 2:41 PM

PLTR

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Shares of Palantir Technologies Inc (NYSE:PLTR) are enjoying a breakout above the $30 level, which is the site of the stock’s September 2021 and July 2024 high. This level is three times the $10 opening price in 2020, when it became publicly listed in a direct initial public offering (IPO). The equity beat earnings estimates and revised its third-quarter and 2024 revenues to above expectations during its quarterly report earlier this month.

PLTR Aug23

The analyst community is mostly negative, with six “buy” ratings compared to 12 “hold” or worse. This leaves plenty of room for upgrades. Shorts have been in covering mode since October, and at the time of this writing, Friday ushered in 28,000 calls at the 32-strike for August expiration. Implied volatility (IV) is looking reasonable, with a reading of 47% compared to the 63-day historic volatility (HV) reading of 50%. Our recommended October call has a leverage ratio of 5.7, and will double on a 17.8% rise in the underlying security.

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