PLTR - Earnings pop incoming?
Updated
I've put a lot of thought into this one. This chart is in log mode as the wide range of prices covered are smoothed and reveal the potential true picture. I give a primary bullish scenario but caveat with multiple different potential outcomes given certain price actions. Trade at your own risk.
As you can see, PLTR put in a significant top near the 61.8% retracement of the major move down from January 2021 to January 2023. In linear mode, it's also a 61.8% retracement (not shown on chart) of the September 2021 top from the January 2023 bottom, further confirming how much of a massive resistance level it is.
Elliot Wave indicates that this was a 3rd wave in a 5-wave upward impulse. For that to be true, PLTR will need to hold the $12 area if it is going to continue down leading into earnings. Should it hold there, the potential for an earnings pop is at our fingertips. If you look at the 2nd wave of the current 5-wave move up, the same thing happened with earnings there leading to a massive move upward into our very explosive 3rd wave.
This leads to our buying opportunity. Should we see PLTR dip below $15 today through Wednesday, October 27th, it would be in the accumulation zone. Set your stop at $12.00 with a GTC-EXT order. This should limit your losses should earnings kickstart a further downward move that breaks support.
Assuming the 5th wave does engage, the potential targets are outlined on the chart. I must caveat though that 5th waves are unpredictable. They can terminate before, at, or higher than the general expected levels. In Elliott Wave, usually only one of the 3 impulse waves (1,3, and 5) will see an extension. With 3rd waves usually targeting the 161.8% fib extension level, the 5th wave target is generally expected to be the 200% level. With every 3rd wave extension level, you can usually expect the 5th wave level to rise the same number of extension levels. In this case, the 3rd wave extended and surpassed the 176.4% level, one extension level above the standard, and came shy of the 200% level. So the general minimum expectation for our 5th wave target should be a minimum of the 223.6% level, which comes in at around $25. Given that the 3rd wave already extended, it should not be expected that the 5th wave will also extend. If it somehow does, the upper target is a gap fill from February on 2021 at $31.34. Profit is generally taken at the minimum level with some runners left for potential upside.
Should PLTR start rising and form an upward pattern prior to hitting my ideal 4th wave target in the mid $12's, it is possible the 4th wave is already in (or maybe it touches the mid $13's one more time). I will add that the shape and structure of a 4th wave that terminates in the $13's holds a far more likely chance of becoming a a descending triangle where the bottom holds flat and the tops terminate lower until the pattern ends. If this were a triangle, it would be most likely that the next touch of the mid $13's would be the c wave with an e wave to come in the $17 range and the e wave to again target the $13's. Due to the nature of the current structure, I only favor a significant earnings pop should PLTR fall to $13 or lower.
Should you see PLTR dip below $12, then the expectation shifts to a major top being in and downward pressure taking this to $10 and potentially lower. Therefore, below $12 range and I recommend getting out and waiting for further clarity. If you hold at a basis higher than the previous top and don't want to sell, consider selling calls to lower your basis or selling $10 puts.
The alternate count not shown on this chart would have the May 2021 low as an A wave, the September 2021 top as a B wave, and the January 2023 bottom as the C wave in a larger degree (A)(B)(C) long term corrective pattern. The recent top at the 61.8% level would be the 3-wave (B) wave of this larger degree, with the bottom (C) wave coming in at new lows over the next 1-2 years. This is why the stop is so important.
Readers should always remember that markets are their own creature made up of millions of individuals and institutions each following some combo of inherent bullishness, inherent bearishness, fundamentals, technicals, stupidity, and pure emotion. Elliott Wave, and specifically Fibonacci Pinball (developed by Avi Gilburt at elliottwavetrader.net and prominent Seeking Alpha author), merely provide a framework based on the observed price action to date. I know that while my wave outline is based on years and years of data and application from not only me, but some of the best in the game, I also know that markets do not follow a set path and that sentiment can remain irrational far longer than I can remain rational. That is why you MUST consider the altneratives and manage risk appropriately. Know the pivot zones that could lead to the primary path failing. In this case, it's the low $12.00 range.
I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors. My analysis is not a recommendation for a specific trade. My analysis outlines a potential scenario and provides risk assessments for multiple alternate scenarios.
-mazag08 - TastyWavez 2023
As you can see, PLTR put in a significant top near the 61.8% retracement of the major move down from January 2021 to January 2023. In linear mode, it's also a 61.8% retracement (not shown on chart) of the September 2021 top from the January 2023 bottom, further confirming how much of a massive resistance level it is.
Elliot Wave indicates that this was a 3rd wave in a 5-wave upward impulse. For that to be true, PLTR will need to hold the $12 area if it is going to continue down leading into earnings. Should it hold there, the potential for an earnings pop is at our fingertips. If you look at the 2nd wave of the current 5-wave move up, the same thing happened with earnings there leading to a massive move upward into our very explosive 3rd wave.
This leads to our buying opportunity. Should we see PLTR dip below $15 today through Wednesday, October 27th, it would be in the accumulation zone. Set your stop at $12.00 with a GTC-EXT order. This should limit your losses should earnings kickstart a further downward move that breaks support.
Assuming the 5th wave does engage, the potential targets are outlined on the chart. I must caveat though that 5th waves are unpredictable. They can terminate before, at, or higher than the general expected levels. In Elliott Wave, usually only one of the 3 impulse waves (1,3, and 5) will see an extension. With 3rd waves usually targeting the 161.8% fib extension level, the 5th wave target is generally expected to be the 200% level. With every 3rd wave extension level, you can usually expect the 5th wave level to rise the same number of extension levels. In this case, the 3rd wave extended and surpassed the 176.4% level, one extension level above the standard, and came shy of the 200% level. So the general minimum expectation for our 5th wave target should be a minimum of the 223.6% level, which comes in at around $25. Given that the 3rd wave already extended, it should not be expected that the 5th wave will also extend. If it somehow does, the upper target is a gap fill from February on 2021 at $31.34. Profit is generally taken at the minimum level with some runners left for potential upside.
Should PLTR start rising and form an upward pattern prior to hitting my ideal 4th wave target in the mid $12's, it is possible the 4th wave is already in (or maybe it touches the mid $13's one more time). I will add that the shape and structure of a 4th wave that terminates in the $13's holds a far more likely chance of becoming a a descending triangle where the bottom holds flat and the tops terminate lower until the pattern ends. If this were a triangle, it would be most likely that the next touch of the mid $13's would be the c wave with an e wave to come in the $17 range and the e wave to again target the $13's. Due to the nature of the current structure, I only favor a significant earnings pop should PLTR fall to $13 or lower.
Should you see PLTR dip below $12, then the expectation shifts to a major top being in and downward pressure taking this to $10 and potentially lower. Therefore, below $12 range and I recommend getting out and waiting for further clarity. If you hold at a basis higher than the previous top and don't want to sell, consider selling calls to lower your basis or selling $10 puts.
The alternate count not shown on this chart would have the May 2021 low as an A wave, the September 2021 top as a B wave, and the January 2023 bottom as the C wave in a larger degree (A)(B)(C) long term corrective pattern. The recent top at the 61.8% level would be the 3-wave (B) wave of this larger degree, with the bottom (C) wave coming in at new lows over the next 1-2 years. This is why the stop is so important.
Readers should always remember that markets are their own creature made up of millions of individuals and institutions each following some combo of inherent bullishness, inherent bearishness, fundamentals, technicals, stupidity, and pure emotion. Elliott Wave, and specifically Fibonacci Pinball (developed by Avi Gilburt at elliottwavetrader.net and prominent Seeking Alpha author), merely provide a framework based on the observed price action to date. I know that while my wave outline is based on years and years of data and application from not only me, but some of the best in the game, I also know that markets do not follow a set path and that sentiment can remain irrational far longer than I can remain rational. That is why you MUST consider the altneratives and manage risk appropriately. Know the pivot zones that could lead to the primary path failing. In this case, it's the low $12.00 range.
I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors. My analysis is not a recommendation for a specific trade. My analysis outlines a potential scenario and provides risk assessments for multiple alternate scenarios.
-mazag08 - TastyWavez 2023
Note
So far it is performing as expected as we are now in the mid $14's with this morning's drop. The yellow trendline from the two previous lows would create a potential triple bottom in the $13.75 range. I would still expect some continuation lower. There are 3.5 days before earnings for this to speak to us and let us know it's intentions. Could earnings pop? Absolutely. Could earnings cause a drop INTO a low? Absolutely. We don't know yet and will watch over the coming days for potential clarity.What you will not get from me is a confirmation to trade a certain way. I will let you use the information I provide to make your own assessment. I will also not be transparent about my own outlook. I currently own zero stock and do not have any active options.
Note
Without a significant drop tomorrow into the $13's, the setup is not yet in place for an explosive move that crushes resistance. That doesn't mean it won't happen. And it doesn't mean I'm calling for the opposite. The main point here is that unless you are a gambler, there just isn't enough confidence to feel good about a specfic post earnings outcome. There is still tomorrow, so let's keep watching.Note
Don't be surprised to see a drop that erases all of the earnings gains. I've adjusted my chart to reflect the double top PLTR just put in as the b wave (which I previously labeled as the October 10 high. I've got the c wave, which we never got before earnings, coming in back in the $12-$14 range.Whether you are a long term hold or you bought in for earnings, there are multiple ways to take profit or hedge your position if you aren't happy with short term bearishness. And remember, below $12 and the 5th wave potential diminshes greatly.
Note
We now have a structure formed off the earnings top that indicates a potential impulsive down wave. If action continues downward with waves that don't overlap, then we are likely heading back down to pre-earnings levels. If the action is corrective with overlapping or sideways structure, then new highs can happen sooner. The $16 area should be very telling.Note
Above $18.62 and this is likely headed for $23-$26 range in an ending diagonal.Note
This is really looking like that earnings boom was an extended b wave in Wave 4. If so, the new c=a landing spot comes in at $14.80. As a c-wave diagonal, this move down has hit its minimum target though. I think the next couple of weeks should clear some things up. I'd be surprised if price takes off back above $18 before earnings. Will continue to watch and provide meaningful updates as the action makes itself clear.Note
PLTR is now in the target zone having hit the minimum target. There are still targets overhead with multiple gaps available. A break below $19.70 would signal that a correction is likely under way.Note
Counting this as completed and in the first wave of the correction. See attached.
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