Watch these Palantir price levels as the stock rises after being added to the S&P 500

Palantir Technologies (PLTR) shares rose in premarket trading on Monday after S&P Global announced late Friday that the big data analytics software company will be added to the benchmark S&P 500 index. The addition will take effect before the market opens on September 23.

Shares of the Denver-based company, which have nearly doubled in value over the past 12 months through Friday's close, are on investors' radar as a possible contender for coveted inclusion in the blue chip index this year as its artificial intelligence (AI) software offering continues to generate gains.

To be included in the S&P 500, a company must have reported a profit in the most recent quarter and have generated cumulative profits over the last four quarters. The software maker easily meets these requirements, having reported a profit for the past seven consecutive quarters, with its most recent quarterly profit being the highest in its twenty-year history.

Palantir shares rose 7.8% to $32.69 about 90 minutes before the market opened on Monday.

Below, we will take a closer look at the technical data in Palantir's chart and point out important price levels that investors should pay attention to.

Bear trap in August

Palantir shares broke out of an ascending triangle in early July before temporarily falling below that pattern during the market-wide sell-off in early August.

However, the stock immediately reclaimed the triangle's upper trendline, climbing to a new multi-year high in the process. The move formed a bear trap, a chart pattern that entices investors to sell or enter short positions before the market quickly recovers.

Looking ahead, investors should keep an eye on several key price levels on Palantir's chart that are likely to attract attention.

Important overhead price levels to keep an eye on

The first level is around $32.70, which is roughly the same as Monday's forecasted open. This area on the chart could offer resistance near similar trading levels that are around last month's high.

A close above this level could send shares up to the $34.75 area. We forecast this target using the measuring principle technique, which involves calculating the distance between the two trendlines of the ascending triangle in points and adding that amount to the upper trendline of the pattern. ($9.25 + $25.50 = $34.75).

Retracement levels to watch

A pullback in the stock would likely initially find support at $29, a point on the chart where the price meets a horizontal line connecting a consolidation area around the July high to the upsloping 50-day moving average (MA).

Further weakness could lead to a retest of the key $25.50 level, where investors would likely look for entry points near the upper trendline of the ascending triangle. Such a move would represent a 16% decline from Friday's close.

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