PLTR: The Best Stock of 2024 Could Face ChallengesPLTR demonstrated exceptional strength in 2024, becoming the best-performing stock in the S&P 500 with an impressive 346% gain since the beginning of the year. However, as we move into December, I notice signs that could indicate a potential correction.
The reasoning behind my outlook lies not in the bearish divergence pattern, which is secondary, but in the interaction between price and volume. Let’s examine the price and volume action on December 20. The volumes were extraordinarily high—imagine this as the level of effort—but what was the outcome of that effort?
The price reached a new high, which sounds great, but it didn’t hold there. Moreover, the breakout was minimal, more like a bull trap inviting buyers to go long on the breakout of the December 9 high.
The price quickly returned close to the opening level of the December 20 candle—the starting point of the pump. If these were genuine efforts from strong buyers, the result would have been significantly different.
Strong markets don’t behave this way. That’s why I anticipate that PLTR may enter a correction, potentially forming a descending red channel. The lower blue line represents the likely target and strong support.
