Keeping A Close Eye On Palantir

This is an intriguing chart. So far, the red and yellow signals have worked well, and the long trade in Palantir from the red buy to the yellow sell would have delivered sensational returns.

The current position for a long trader is to be out of the stock but watching with great interest. By all accounts, the fundamentals remain electrifying. The world needs help to implement AI, and Palantir is there to offer that help.

What we need is the old combo to return, great fundamentals and a great chart. We don’t have it yet, but if it appears, you could buy on a green buy signal. I would prefer to wait for a yellow buy signal, a broken trend line and most exciting of all, a steepening of the red line to indicate an acceleration in upward velocity.

The Nvidia chart looks similar. I know – a market valuation greater than the UK’s GDP is a lot, but it doesn’t really tell us anything about where Nvidia might be going. For that, we need the chart which is showing a yellow sell signal. Long traders would be out and watching unless they were following a total red line system – buy on a red buy and sell on a red sell.

Like Palantir, Nvidia has an incredible story. Its products sit at the heart of the AI revolution. It is the AI stock, the ring to rule them all. If it does give a buy signal, in which all the moving averages are climbing in tandem, a purchase would be indicated. A steepening trajectory for the red line would add to the excitement.

Technically, both these stocks could go either way, but a break higher is a possibility.

ARM Holdings has suddenly got an interesting chart and seriously exciting fundamentals. What is missing but may be imminent is an across-the-board buy signal. Four times ARM shares have tried to move decisively higher and failed. Attempt number five may be coming. Two months ago, all the moving averages were declining; now only two are. If all three start to climb, ARM would be a buy.

On 24 March 2026, ARM Holdings hosted an “ARM Everywhere Event’. Their projections for FY 2031 electrified the share price.

Back to FYE31: we see two meaningful profit engines. First, we expect the IP business to reach about $10 billion of revenue, achieve a 99% gross profit margin, and deliver over 65% non-GAAP operating margin. We are today increasing our operating margin target by 500 basis points from our previous long-term target of 60%. Second, we expect the Arm AGI CPU business to reach about $15 billion of revenue, with a gross margin of at least 50% and a non-GAAP operating margin of over 30%. Putting those together, we have a consolidated business with $25 billion of revenue, industryleading blended gross profit and operating margins, and more than $9 of non-GAAP EPS power in FYE31. This is not a story of choosing between IP and chips. It’s a story of combining a very high-margin IP model with a large, fast-growing, and accretive chip business. Let me close on the three points that I started with. First, customer demand is allowing us to materially expand our opportunity through selling chips. We already have line of sight to over $1 billion of demand from some of the companies that you met today, and are forecasting $15 billion of incremental revenue. Second, our existing IP business continues to have strong underlying growth drivers, with the chip business compounding and not cannibalizing the IP business. We expect this to deliver around $10 billion of revenue in FYE31. Third, by FYE31 the combined model is significantly accretive to revenue, gross profit dollars, and operating profit dollars, with more than $9 of EPS power. Because much of that investment is already in the base, the incremental economics are very attractive.

Rounding the figures, if ARM delivered $10 of earnings per share in 2031, it would be on a PE ratio of 15, which would be low for such an amazing business. Nevertheless, we need the chart to make the shares a buy.

One of my subscribers tells me it is not all gloom and doom out there. One of the examples he cited was Ciena.

No question, that is an exciting chart. Since the red line buy signal in January 2024, the shares have risen almost 10-fold. Below is what AI has to say about the strong performance.

Ciena (CIEN) shares have shown significant strength, with the stock experiencing a massive rally of over 300% over the last 12 months, driven by its role as a key supplier in the booming AI infrastructure sector. As of late March 2026, the stock has hit new 52-week highs, outperforming many peers, due to high demand for its advanced optical networking gear from cloud providers and data centre operators.

Key factors driving the strength in Ciena shares include:

AI-Driven Demand: The explosion in AI applications requires immense data processing power, which in turn demands high-speed optical networking to connect data centers. Ciena’s high-performance optical networking platforms (such as WaveLogic 6 and RLS) are considered critical components for this infrastructure, driving rapid revenue growth.

Strong Growth from Cloud Providers: Hyperscalers (large-scale cloud providers) are rapidly upgrading their networks. A significant portion of Ciena’s revenue is now driven by these non-telco partners, including direct contracts with cloud companies, which helps diversify away from slower-growing traditional telecommunications customers.

Massive Order Backlog: Ciena finished its first quarter of 2026 with a robust $7 billion order backlog, offering high visibility into future revenue and indicating durable demand into 2027.

Positive Financial Performance and Guidance: The company has consistently delivered strong earnings, including recording a 33% year-over-year revenue growth in Q1 2026. Management has raised revenue and margin guidance, expecting operating margins to expand to 17.5%–18.5% in FY2026.

Technological Leadership: Ciena is viewed as a leader in 400G and 800G coherent optical technology, providing it with a competitive edge in high-speed, long-haul, and metro networking.

Acquisition Strategy: The company’s acquisition of Nubis Communications strengthens its position in the AI interconnect space, particularly in co-packaged optics, enhancing its long-term growth prospects. 

It is not the easiest time to buy the shares, so extended from any recent buy signal. This would be buy and hope rather than a considered long trade, but full marks for excitement.

By the way, I welcome such helpful contributions from my subscribers. It makes me feel we are operating as a team. The stock market is a big place; the more eyes the better.