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1 Stock To Buy, 1 Stock To Dump When Markets Open: Palantir, Apple

Published 02/21/2021, 07:40 AM
Updated 09/02/2020, 02:05 AM

Stocks on Wall Street closed mixed on Friday, as investors sold shares that have rallied throughout the COVID-19 pandemic and rotated into cyclical stocks which are likely to benefit from rising interest rates.

The NASDAQ Composite posted a weekly loss of 1.6%, while the S&P 500 shed 0.7%. The Dow Jones Industrial Average fared better with a small gain of 0.1%.

COMPQ:SPX:INDU Daily

Between another heavy batch of high-profile earnings reports, as well as key Congressional testimony from Federal Reserve Chair Jerome Powell and more important economic data, the week ahead is expected to be a busy one on Wall Street. 

Regardless of which direction the market goes, below we highlight one stock likely to be in demand in the coming days and another which could see further downside. 

Remember though, our timeframe is just for the upcoming week. 

Stock To Buy: Palantir

After sliding more 17% so far in February, shares of Palantir Technologies (NYSE:PLTR) look set to finally break out of their recent downtrend and resume their march higher in the coming days.

The latest positive catalyst highlighting the strong demand for the enterprise software company came after star investor Cathie Wood—the CEO and chief investment officer of ARK Invest, which runs three of the market’s best-performing ETFs—loaded up on shares of the data analytics software provider.

In total, the ARK Innovation ETF (NYSE:ARKK) and ARK Next Generation Internet ETF (NYSE:ARKW) acquired 6.8 million shares of Palantir last week as Wood bought the dip after disappointing quarterly results and an IPO lockup expiration caused the stock to drop by as much as 34% over a span of six sessions.

PLTR Daily

PLTR shares—which despite recent turmoil are still up 205% since making their trading debut at $10 on Sept. 30—closed Friday’s session at $29.00, giving the Denver, Colorado-based big data firm a market cap of $43.8 billion.

Despite concern over stretched valuations, Palantir trades at a sky-high price-to-sales (P/S) ratio of almost 47. Many investors, including Reddit’s infamous army of day traders, have taken an interest in the name.

In fact, the comment volume for Palantir on the WallStreetBets Reddit forum in recent days has overtaken mentions of other WSB favorites, such as GameStop (NYSE:GME) and AMC (NYSE:AMC).

Palantir's emerging status as a social media, meme-stock favorite could result in significant buying pressure from retail traders.

Stock To Dump: Apple

Apple (NASDAQ:AAPL) stock looks set to remain on the back foot in the week ahead. A weak technical picture will likely result in more selling pressure in shares of the world’s most valuable company after they broke below two key chart levels.

AAPL ended Friday’s session at $129.87, roughly 12% below its all-time high of $145.03 touched on Jan. 25, earning the Cupertino, California-based tech and consumer electronics giant a market cap of $2.17 trillion.

AAPL 50DMA Chart

The stock closed below its 50-day moving average for the first time since Nov. 24. Many investors often view the 50-DMA as an effective indicator of a stock’s short-term trend, with price above it pointing to an upward bias and action below it warning of further weakness.

However, in an even more worrying sign for bulls, Apple’s stock also broke below the key uptrend line that marked its recovery off the March lows.

AAPL Trend Line Chart

Sentiment on the iPhone-maker took a hit late last month when Apple reversed lower despite releasing its best quarterly earnings report in its history.

News last week that two of the tech behemoth’s largest shareholders trimmed their stakes also weighed. The Vanguard Group disclosed that it owned 1.26 billion Apple shares as of Dec. 31, down from 1.28 billion shares on Sept. 30.

Meanwhile, Warren Buffett’s Berkshire Hathaway (NYSE:BRKa), (NYSE:BRKb)—Apple’s second largest shareholder—revealed that it owned 887.1 million AAPL shares, down from the 944.3 million shares it owned as of Sept. 30.

Apple was one of the top performers of 2020, gaining more than 80% amid strong demand for its lineup of new iPhone 12 models, but so far in 2021, it has slipped 2.1%.

Latest comments

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I don't get the hate. At the time of this article AAPL was 129 and PLTR was 29. Now AAPL is 120 and PLTR is 23. If you sold AAPL and bought PLTR you technically lost less money. Kek
tesla and apple looking a tad weak - these gems of the way up are showing early indicators that the nasdaq generally is coming to the end of its bull run. I've already shorted Tesla pretty much from its top where the fib 1.618 extension line was clearly indicating a reversal.
Not sure about your dump on Apple. I get your point, but for me, Apple is a long-term investment, always. Kinda agree with the increased PLTR interest, although valuation looks pretty pumped to me.
Insiders at PLTR selling off big time and the poor retailers will become the bagholders. If PLTR is really a great stock why such panic insider selling? This is a paid article.
I bought it at like nothing in still up over 100% going keep since got in cheap but would still sell if I didn't think it bounce back
this guy is working on behalf of wall street trying to make you lose money. many people lost money on pa lantir today. I used to listen to his advice list a lot money. I don't know how he sleeps at night.
yeah, do the exact opposite of all mainstream media - they are the last people you want to be taking advice from.
Go to sleep
What we have to DUMP is reading this type of article. if I listened to these tips, I would be ruined ...
last week he said buy roku when it was high i lost a lot of money.
now apple is 125, not all analysis is wrong
Very dump, selling aapl to buy PLTR hype chasser.
who is this guy?
Too late!
Using Vanguard postioning can be misleading if a lot of the trading activity occurred in its index funds, which do not buy/sell based on a view of the stocks future performance or fundametals.
we see that 'break down' under 50 ma, have been 'false' (bear traps) (apple). So if you suggest selling now (too late), you can be burned (the trimming from the famous was small).
Your posting looks you intend to do trading instead of investing, short sight. When AAPL is up, it would be up suddenly and you would miss the jump and end up not buying it at the previous level. Right now it looks down or flat, but it's not that much and long-time investors can wait and it's a cushion or kind of safer place in weak market times. If one has too many positions in AAPL, then it is a different story and he/she can trim some to maintain a better allocation and shift some to high-risk high-growth/reward stocks like PLTR.
Well long hold apple, never give up.
I see this a great opportunity to buy AAPL dip. Apple keeps delivering the best products, including the latest own processing chip, I'm super confident in its VR and Apple Car future.
the nasdaq is overpriced and that includes companies that have been buying back their shares for years - there are tiny little companies with fantastic products with patents and good backing and funding that can offer so much upside with far little downside risk - it's silly investing in momentum stocks for ever - the fear of inflation will always see folk moving into value stocks and commodities - it's happening now. the nasdaq bubble will burst - don't be holding the bag - be happy with the massive profits over the past ten years - await a large correction if you want to hold these big nasdaq players like apple and tesla
PLTR to the moon. KARP = Musk. 100
Just fake news. I don’t understand this relentlessness against Apple... I buy (more) the dip and I hold.
For what it's worth, I have lost far more money by selling AAPL rather than holding it. To sell this company is a mistake.
folk used to say that about IBM and GE - all companies *****up in the end are are taken over by a new generation - that is the nature of the universe.
Get some $DOGE Coin?
palantir needs years to fill in that evaluation with everything going right, Apple doesn't have that problem
best joke of weekend...dump Apple! LOL I hope so, I want to buy some moore, cheaper.
Haha after that i stopped reading and thought yeah ok bad advice lol
last time u said buy tesla and dump alibaba...
I second that comment. Buy both. Apple will always be there PLTR has high growth prospects.
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