Michael Burry drops rare technical warning on Palantir stock

When Michael Burry talks, markets listen. Not ever immediately, and not ever correctly, but they listen.

The capitalist who famously shorted the lodging marketplace up of the 2008 fiscal situation published a caller station connected his Substack leafage connected June 2, and the taxable was Palantir Technologies (PLTR). His verdict was direct.

Michael said that the banal is astatine a "crossroads," his abbreviated presumption remains unchanged, and the illustration is forming what helium described arsenic a head-and-shoulders-type topping pattern.

The marketplace responded the adjacent day. On June 3, Palantir dropped 6.55% to $142.20, according to Yahoo Finance.

PLTR is down 20% twelvemonth to day compared to the S&P 500's 10.35% gain, Yahoo Finance confirmed. That’s a stark opposition to a institution that delivered 85% year-over-year gross maturation successful its astir caller 4th and raised full-year guidance to 71% growth, according to Palantir’s net statement.

Burry's informing sits astatine the intersection of 2 wholly contradictory stories: bonzer cardinal momentum and what helium believes is an unsustainable method and valuation setup.

Michael Burry questions Palantir valuation

Burry's June 2 Substack station was unusually specific. He did not conscionable telephone Palantir overvalued successful a wide sense. He attached a number.

Palantir trades astatine astir 16 times its intrinsic worth based connected my assumptions.

Burry described the banal arsenic "a soil castle, supported for present by the AI applications narrative."

He added that the illustration reflects "the waxing and waning of highly bullish psychology" surrounding the company.

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The head-and-shoulders signifier Burry referenced is 1 of the astir wide cited reversal formations successful method analysis.

The structure, characterized by a peak, a higher peak, and a little consequent peak, with a neckline below, is interpreted by method analysts arsenic grounds of fading buying momentum and a imaginable inclination reversal from bullish to bearish.

Burry noted the signifier connected Palantir's illustration and argued it is accordant with his bearish thesis.

A deeper dive into Palantir's technicals

My reappraisal of the method setup from existent terms levels adds context. Looking astatine the play illustration generated connected TradingView, Palantir has been rejected astatine the $150 to $160 absorption portion (previously support) connected aggregate attempts.

With that, the $135 and 125 levels correspond 2 important enactment floors. If bullish momentum returns and the banal closes convincingly supra $160 with sustained volume, the bearish method thesis gets meaningfully challenged.