Photo courtesy of Palantir. 

Palantir Technologies Inc (NYSE: PLTR) is set to report earnings on May 11 and traders are hoping that will mark a turnaround for its stock.  

Palantir hit an all-time high of $45 following its Jan. 26 “Demo Day” where the company revealed and demonstrated its proprietary software systems. Since then, shares have fallen 53% despite the S&P 500 reaching record highs.  

Sentiment in Palantir could shift following its first-quarter 2021 results, especially if the company posts a big earnings beat. On Tuesday a number of options traders bet Palantir's stock is headed higher and the chart looks primed for a move. 

The Palantir Chart: Palantir broke up from a bullish falling wedge on April 21 and spent the following eight trading days consolidating the move. On Tuesday morning, Palantir’s stock was trading down 4% on the day but holding support near the $21 level. 

The $21 mark is also a quadruple bottom for Palantir’s stock after bouncing from that level on Mar. 25, Mar. 30, April 20, and Tuesday. The $21 level also coincides with the upper sloping line of the falling wedge and a back-test of that line is considered healthy. 

Palantir’s stock is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day EMA, both of which are bearish indicators.  

Bulls want to see the upper sloping line of the falling wedge hold as support and for bullish volume to come in to push Palantir’s stock up towards its next resistance at the $25 level. If the stock is able to clear that level and make it support, it could make a move back up towards #30 where there is a gap. Since gaps are filled 90% of the time, it's likely Palantir’s stock will revisit that level in the future. 

Bears want to see Palantir drop back down into the falling wedge and continue to trend downwards towards its next support level at $21.04. If Palantir’s stock is unable to hold that level as support, it could fall to $17.54 before finding another support level.  

(Click on image to enlarge)

The Palantir Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:  

• At 10:06 a.m., Tuesday a trader executed a call sweep, near the ask, of 327 Palantir options with a $20 strike price expiring on May 21. The trade represented a $63,438 bullish bet for which the trader paid $1.94 per option contract. 
• At 10:11 a.m., a trader executed a call sweep, near the ask, of 500 Palantir options with a $20.50 strike price expiring on May 7. The trade represented a $57,500 bullish bet for which the trader paid $1.15 per option contract. 
• At 10:11 a.m., a trader executed a call sweep, near the ask, of 540 Palantir options with a $20.50 strike price expiring on May 7. The trade represented a $62,100 bullish bet for which the trader paid $1.15 per option contract. 
• At 10:25 a.m., a trader executed a call sweep, near the ask, of 200 Palantir options with a $20 strike price expiring on Aug. 20. The trade represented a $72,000 bullish bet for which the trader paid $3.60 per option contract. 
• At 10:33 a.m., a trader executed a call sweep, near the ask, of 309 Palantir options with a $21 strike price expiring on June 18. The trade represented a $63,654 bullish bet for which the trader paid $2.06 per option contract. 
• At 11:03 a.m., a trader executed a call sweep, near the ask, of 211 Palantir options with a $15 strike price expiring on June 2022. The trade represented a $177,240 bullish bet for which the trader paid $8.40 per option contract. 

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately. 

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position. 

PLTR Price Action: Shares of Palantir were trading down 5.4% to $21.08 at the time of publication.