Palantir Technologies Inc.‘s PLTR stock price has jumped 355% over the past 12 months. However, analysts are now raising concerns about a potential downturn as key indicators suggest troubled waters may be on the horizon.

Palantir’s Stock Surge Raises Eyebrows Amid Recent Sales

Cathie Wood Makes a Move

On Monday, Cathie Wood, CEO of ARK Invest, sold $15 million worth of Palantir stock, totaling 196,728 shares. This transaction involved her flagship ETFs, including the ARK Innovation ETF ARKK and the ARK Next Generation Internet ETF ARKW.

Despite her ongoing support for innovative tech companies, Wood’s shift towards Amazon.com Inc. AMZN highlights apprehensions surrounding Palantir’s hefty valuation. This decision came shortly after Morgan Stanley downgraded the stock to “underweight,” assigning a price target of $60, even with the stock’s impressive gains.

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Conflicting Signals in Palantir’s Stock Charts

The technical analysis of Palantir’s stock reveals conflicting trends.

Chart created using Benzinga Pro

The stock’s 200-day simple moving average (SMA) at $37.69 is encouraging, while shorter-term averages, like the eight-day ($77.62) and 20-day ($76.28) SMAs, indicate potential selling pressure.

Further complicating the picture, the moving average convergence/divergence (MACD) stands at a bullish 3.16, yet the relative strength index (RSI) of 54.77 suggests market sentiment is somewhat cautious.

Are We Facing a Market Overhang or an Opportunity?

Palantir’s stronghold in U.S. government contracts and its commercial activities support its growth story, but opinions among analysts are mixed. Jim Cramer, host of CNBC’s *Mad Money*, hinted at the possibility of adding Palantir stock to his portfolio, presenting a contrary perspective to the bearish views from Morgan Stanley.

However, a recent 4.97% decline in the stock over the past month prompts caution among investors.

With a valuation that sparks debate among its followers, Palantir finds itself at a pivotal moment. Supporters point to long-term prospects and a solid 50-day SMA of $65.73, while skeptics highlight recent selling trends and the stock’s elevated price.

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