Palantir (PLTR) reports earnings Monday after the closing, with both stock and short models flashing bearish signals. The stock and short interest have both climbed, a pattern that often leads to reversal. With options pricing in a large move, risk is elevated going into earnings.

• Palantir PLTR reports Monday after the close.

• Both the stock model and short model are bearish and reinforce each other.

• The stock and short position are up significantly in recent activity.

• The stock tends to revert, and the shorts tend to be right.

• The stock is priced by the options to move 14% either way and usually moves 16%.

Longer term the short interest is down.

With bearish indicators from both the short interest and stock performance models, Palantir faces a heightened downside risk. Short sellers have a track record of being directionally correct in similar setups. Volatility metrics support an elevated risk profile as we approach earnings.

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