To The Moon

I think there are something we need to understand why we should not be overly concerned about the recent insider selling of 400,000 shares by Palantir's CEO, Alex Karp, for several key reasons.

In this article I would like to contextualize the insider sale, strategic reframing for investors for example, how short-term holders could stay constructive. I am a long-term holder for $Palantir Technologies Inc.(PLTR)$ but have been doing short-term trade for PLTR to take advantage of some short pullback.

Contextualizing the Insider Sale

Magnitude vs. Ownership: While 400K shares sounds large, it’s a fraction of Karp’s total holdings. He's reportedly sold over $1.9B worth of shares since last year and still retains a substantial stake. This sale doesn’t signal abandonment—it’s more likely part of a structured liquidity plan.

Timing & Valuation: PLTR stock has surged over 340% since early 2024. Executives often monetize gains after such rallies, especially when options vest or tax windows open. This is not uncommon and doesn’t necessarily reflect a bearish outlook.

No Fundamental Shift: The sale coincided with strong quarterly results and upward-revised earnings guidance. Palantir also secured major contracts, including an $823M deal with the U.S. Army. Operational momentum remains intact.

Strategic Reframing for Investors

Here is why short-term holders can stay constructive:

1. Insider Selling ≠ Insider Bearishness

Many insider sales are pre-scheduled under Rule 10b5-1 plans.

Karp’s sale is part of a broader liquidity cycle—not a signal of deteriorating fundamentals.

2. Macro Tailwinds

Dovish Fed signals and potential rate cuts support high-growth tech valuations.

PLTR’s AI-driven government and enterprise contracts are well-positioned for fiscal expansion themes.

3. Technical & Sentiment Setup

PLTR pulled back ~8.8% post-sale, but this may offer a volatility-driven entry for short-term traders.

Elevated implied volatility could make bullish option spreads attractive (e.g., short puts or call diagonals).

Scenario Modeling: Insider Sale vs. Stock Trajectory

Technical & Macro Overlay

Valuation: Forward P/S ~70x, P/E >580x—stretched even by AI standards.

Momentum: Beta >2, RSI cooling, short interest rising.

Macro: AI sector rotation + mean reversion algo flows = elevated downside risk.

Forward Guidance: Q3 revenue guide beat; $10B Army contract adds tailwind.

Strategic Takeaways

Karp’s sale is likely tax-driven, not a bearish signal—but it coincides with a valuation inflection and sentiment shift.

If PLTR holds above $150 and reclaims $160+, the bull case remains intact.

A break below $145 could trigger a re-rating, especially if commercial growth lags or AI enthusiasm fades.

For asymmetric setups: watch for volatility cone compression, RSI divergence, and volume-weighted momentum shifts near earnings in November.

Challenge Of PLTR Pullback From Assessment Of Monthly 12-EMA

Based on the ‘infamous’ 12-EMA on a monthly chart, we can see that PLTR is trading far away from the 12-EMA (short-term), this normally mean that we would be seeing pullback, until PLTR trend towards near the 12-EMA, which is around $130 to $145, so for the time being, I think it might be a good idea to use option spread to trade PLTR.

So based on what we have seen from how PLTR might be trading over the next one month (30 days), I would like to share how I intend to play PLTR using Option.

Option Spread Simulation: September 26, 2025 Expiry

Long Put Spread (Hedge Scenario)

Strategic Layering

• Use the heatmap to guide thematic conviction.

• Overlay technical score with macro tailwinds to time entries.

• Deploy option spreads to express volatility views and hedge asymmetric setups.

Summary

The CEO's recent sale is more about routine financial management and meeting tax obligations than it is a bearish signal. The company's recent strong performance, particularly its first-ever quarter with $1 billion in revenue and robust growth in its U.S. commercial and AI segments, provides a more meaningful indicator of its fundamental health than a pre-planned stock sale.

I think as investors, I have a long-term position on PLTR, but I would like to take advantage of any possible volatility that might arise from the concerns over the insider trading.

Appreciate if you could share your thoughts in the comment section whether you think PLTR might have a chance for a downward movement due to the insider trading news and also impact from Nvidia earnings.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.