Shares of Palantir Technologies (PLTR) are likely to be in the spotlight Monday after Nasdaq announced late Friday that the analytics software provider was added to the Nasdaq 100 Index along with MicroStrategy (MSTR) and Axon Enterprise (AXON).

The stock’s addition to the tech-heavy benchmark comes after it more than quadrupled year-to-date through Friday’s close, driven by growing demand for the software maker’s customizable artificial intelligence (AI) offerings. The company’s shares became eligible for inclusion in the index following a strategic move from the New York Stock Exchange (NYSE) to Nasdaq last month.

Below, we break down the technicals on Palantir’s weekly chart and identify key price levels that investors may be paying attention to.

The bullish breakout in cup and handle continues

Palantir shares have continued to trend sharply higher since breaking out of a multi-year cup-and-handle pattern in August. Trading volumes have supported the rise, indicating buying participation from larger market participants.

The Relative Strength Index (RSI) confirms bullish momentum, although the indicator’s elevated value above 80 indicates overbought conditions that could lead to price volatility in the short term.

Let’s use technical analysis to forecast a longer-term bullish price target while highlighting key support levels that could generate buying interest on retracements.

Chart-based bullish price target

To predict a potentially bullish price target, investors can use the measurement principle, a chart-based technique that analyzes the cup and handle pattern to predict a future move.

When we apply the method to the Palantir chart, we calculate the percentage change in the “cup” of the cup and handle and add it to the upper trendline value of the pattern. For example, we add a 383% increase to $29, forecasting a target of $140.07, about 85% above Palantir’s Friday closing price.

Important levels to keep an eye on during retracements

Should profit-taking occur, the stock could initially fall back to support around $45, a point on the chart where investors could look for buying opportunities near a brief period of consolidation in the stock in October.

Finally, selling below this level could trigger a decline to a support zone between $33 and $29. This area on the chart would likely attract buying interest near the upper trendline of the cup and handle pattern and the upward-sloping 50-week moving average.

The comments, opinions and analyzes expressed on Investopedia are for informational purposes only. Please see our Warranty and Disclaimer for more information.

At the time of writing, the author does not own any of the securities mentioned above.