Palantir stock: Institutional vs. retail trading trends

Yahoo

07-05-2025

00:00
Jared
Palantir is having its worst day in exactly one year. And the reason is just the same as it was 12 months ago. A big disappointment on some key earnings metrics. So, let's dive in and see how retail traders have been trading this stock over that time period. I'm Jared Blickre, host of Stocks in Translation. First off, this is a year-long chart. In white, we have the price performance of Palantir stock that I'm tracing along right now. And in the green, we have a line from Vanda Research. This tracks retail participation and retail buying. It is a 10-day moving average offset buying. And you can see there's kind of a cyclicality to it. And a lot of times when price goes up, you'll also see this retail buying move up. And that means that retail traders are supporting the price movements. But it's not always the case. Sometimes it's institutions that are supporting it. So, this is a six-month chart, and we're using a five-day moving average, so it's a little bit more volatile. And here we have in white, still, this is Palantir, and there's that same bull pattern that I was just highlighting. And in green, we have that five-day moving average of the flows. Now, what's interesting, and a representative from Vanda Research pointed this out to me, just take this price example, we had a little bit of a dip in price, then a recovery, and at the time, this was a recovery to brand new highs, and we didn't really see retail join the party until it broke to new highs. And actually, before that, they were selling. So, it was institutions that were supporting the price, and then retail was chasing the move. And that's kind of important. Sometimes people say retail is always chasing, but I found that's not always the case. So, I want to dig a little bit deeper into the price action over the last three days, because as I said, we had a huge dip in Palantir, about 10% drop. This chart goes three days back, and I have Palantir here in white again. Here's that drop, and we can see that today, there was a little bit of a recovery. Now, I have both large player and small player effective volume. Now, these are different measurements that what we were tracking with Vanda just a minute ago. This happens to be the discovery of Pascal Willemain, and he has something called effective volume. And he breaks down the price action into small player and large player. So, the small player is a retail player. And what I want to show you here is in green, the institutions were selling, they were selling that dip in the morning, and retail was buying, and then retail sold. So, retail's kind of driving the trade up and then down, maybe day trading. Meanwhile, institutions, once we had that second dip into the morning, or once we got to that high, rather, they have been supporting price since. So, it looks like the large players, the institutions, have stepped in a bit. So, Palantir is one of those retail darlings, and we've seen a lot of retail excitement over it in fits and starts. It's a day trading favorite. And sometimes retail, sometimes retail traders are the impetus for the moves that we see in the stock, and sometimes it's the institutions. Today, I think it's kind of a mix of both.