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Palantir (PLTR) stock was rebuffed by 7% on Tuesday after looking like it had achieved escape velocity on Monday. Shares of the artificial intelligence company opened on Tuesday at $21.11 but have since slidden below $20.

Palantir is simply following the lead of the broad market as the S&P 500 and Dow Jones have both backtracked more than 0.2%, while the NASDAQ pulls back more than 0.6%. Tuesday’s stock market consolidation comes after the S&P 500 put an end to its three-month correction in the shortest period of time in 50 years, according to Deutsche Bank analysts.

Palantir stock news: NHS contract is official

On Tuesday, Palantir announced what had been rumored for weeks – the company founded by Peter Thiel has been selected to lead a group of firms that will overhaul the public health service of the United Kingdom using a new digitized database.

Palantir has been chosen to head up the 330 million British Pound contract ($413 million), which is expected to last for seven years. Other consulting firms such as Accenture, PwC, NECS and Carnall Farrar will also contribute to the contract.

The contract is focused on a new software platform called the Federated Data Platform or FDP. The main thrust of the overall is to reduce patient waiting times and decrease hospital discharge delays at the National Health Service (NHS).

In a statement, the NHS said, “Pilot projects using the new data-sharing approach have seen a drop in waiting times for planned care and in discharge delays, and seen faster diagnosis and treatment times.”

In one such pilot project, the North Tees and Hartlepool Trust hospital system was able to reduce long-term stays by 36%, which allowed nearly 8% more patients to receive care than usual.

“This award is the culmination of 20 years of developing software that enables complex, sensitive data to be integrated in a way that protects security, respects privacy and puts the customer in full control,” said Palantir CEO Alex Karp in a statement.

Before the present contract, Palantir worked pro-bono to help the NHS schedule covid vaccinations and surgeries.

Palantir stock forecast

A pullback had to ensue at some point, since PLTR stock has continued rallying since its third-quarter earnings beat at the start of the month. The stock has rallied more than 46% since November 1.

Last Friday, Palantir’s stock price closed above the $20.24 range high from August 1. But the Relative Strength Index (RSI) showed that PLTR was overbought after such a brisk rally in the first half of November.

A likely support level at this point is the $18 handle, which acted as resistance in October and then as support in the first part of this month. Traders will give this level more credence since the 21-day Simple Moving Average (SMA) is cresting in the vicinity.

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PLTR daily chart

On Monday, PLTR broke above the $20 to $21.15 support band that largely held up the share price during the March through July period of 2021, shortly after the company went public. That band might still have significance as PLTR was only able to break through it for the first time in more than two years for a single session before backtracking.

If PLTR breaks back above $21.15 as the market turns its expectations toward a Santa rally, then bulls may focus their energy on the $29 to $32 target that shareholders haven’t seen in two years.

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PLTR weekly chart

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