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This stage is not just a temporary dip, but a clear downward trend
following an oversold saturation phase, where the stock loses its historical momentum and begins searching for a new bottom.
Breaking the 30-week moving average (30-Week SMA) is a warning sign for anyone who believes in technical analysis that the "trend" may have changed.
Valuation gap (P/E ratio):
Despite the sharp decline over the past two days,
the stock still trades at a very high forward P/E (Forward P/E) approaching 110 times.
In investment language, this means you're paying today for profits that the company won't realize for many years of ideal growth.
This valuation makes the stock extremely sensitive to any negative news,
because the "margin of safety" is almost nonexistent.
Why did the stock fall now?
The recent decline wasn't just a technical correction,
but driven by a wave of selling in the tech sector coinciding with investors reassessing the hefty capital expenditure on AI.
Wither, being at the forefront of this sector, was the first to pay the price when doubts arose about the sustainability of this growth.
In summary..
Should we buy?
Successful investing isn't just about buying a good company,
but buying a good company at a "reasonable" price.
Buying now, while the stock is in "Stage Four"
and with a P/E ratio exceeding 100,
is a kind of gamble on miracles rather than a value-based investment.
The golden rule says:
"Don't try to catch a falling knife."
Waiting for the stock to stabilize and start building a new "base" is the wise professional behavior,
as markets always give second chances to those who have patience.
What do you think..
Do you see Palantir's decline as a rare opportunity
or the beginning of the end of the astronomical valuation bubble?
Share your opinion with me,
And follow me to keep up with smart liquidity movements.
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