Shares of Palantir Technologies (PLTR), a company specialising in big data analytics software, delivered an unpleasant surprise to investors:
→ just last week, the stock was trading at its all-time high of around $190;
→ yesterday, the price collapsed below $150. At yesterday’s intraday low, PLTR stock had dropped almost 25% from its record peak.

Why Did Palantir Technologies (PLTR) Stock Fall?

Bearish sentiment may have been driven by:
→ capital rotation from risk assets into so-called defensive stocks ahead of the Federal Reserve Chair’s speech at the Jackson Hole Symposium (as we reported yesterday);
→ growing speculation that a “bubble” is forming in the technology sector, which could burst.

According to Investor’s Business Daily, Andrew Left, founder of Citron Research, bet on downside in PLTR, arguing that the stock is severely overvalued following its phenomenal 340% rally in 2024.

Technical Analysis of Palantir Technologies (PLTR) Stock

In our previous analysis of PLTR’s price action, we:
→ identified an ascending channel (shown in blue);
→ suggested that the upcoming earnings release would push the stock towards the upper boundary of this blue channel.

Indeed, the strong earnings report on 5 August acted as a catalyst for the surge (breaking through resistance at $160, as indicated by the arrow) towards the channel’s upper boundary. However, the optimism stemming from these fundamentals was swiftly and completely erased – a highly significant bearish signal.

That said, the bulls still have valid reasons to remain hopeful, as the price:
→ staged a false bearish breakout below the key $145 level, which had previously acted as resistance (and has now flipped into support);
→ closed yesterday’s volatile session above its opening price (forming a dragonfly doji on the daily chart);
→ thus, the blue channel remains valid, with demand showing signs of aggression.

We can assume that the market has undergone a stress test and, after the volatility spike, the price has returned to the prevailing ascending channel, maintaining the uptrend. If so, the bulls will need to prove their resolve by overcoming key resistance levels at $160 and $170 (these mark not only the gap boundaries but also psychological barriers). If successful, PLTR’s price could advance towards the channel’s median line.

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