Palantir Plunges 7.47% on Heavy Volume as Technicals Turn Bearish

Palantir (PLTR) declined 7.47% in the most recent session to close at 173.07 on elevated volume of 105.5 million shares, triggering a comprehensive technical review. The analysis below follows the required framework without visual outputs, leveraging probabilistic language and highlighting confluences/divergences.
Candlestick Theory
Recent price action shows a bearish engulfing pattern formed by the 10/02 close at 187.05 (white candle) followed by the 10/03 decline to 173.07 (large black candle), suggesting rejection near the $190 resistance level established in August. Key support emerges at $170.77 (10/03 low), aligning with the September swing low of $169.39. Resistance is solidified at $188-$190, where the price peaked twice in August and October, creating a double-top pattern. The breakdown below $177.50 (September consolidation zone) adds bearish confirmation.
Moving Average Theory
The 50-day moving average (approx. 176.50) was breached decisively during the 10/03 selloff, signaling short-term bearish momentum. However, the 100-day MA (approx. 167.00) and 200-day MA (approx. 128.00) maintain upward slopes, indicating the longer-term uptrend remains intact. The 50/200-day golden cross formed in Q1 2025 continues to provide structural support, though the current price trading below the 50-day MA may trigger additional near-term selling pressure.
MACD & KDJ Indicators
MACD exhibits a bearish crossover with the signal line, and the histogram shows accelerating negative momentum following the 10/03 decline. KDJ registers a bearish configuration with the %K line (currently ~45) crossing below the %D line from overbought territory (>80 on 10/02), suggesting waning upward momentum. Neither indicator shows divergence, with both confirming the price pullback. The KDJ reading implies neutral territory, reducing immediate oversold rebound expectations.
Bollinger Bands
Bollinger Band width expanded sharply on 10/03 as volatility spiked, with price closing near the lower band after testing $170.77. This deviation outside the lower band may indicate short-term oversold conditions. However, the breakout below the 20-day moving average (approx. 179.50) and the absence of prior band contraction (which often precedes large moves) suggest the breakdown has momentum. A close back inside the bands would be needed to signal stabilization.
Volume-Price Relationship
Volume surged to 105.5 million shares during the 7.47% decline, significantly exceeding the 10-day average volume of 58 million and marking the highest volume session since late August. This high-volume breakdown validates bearish momentum, indicating institutional participation in the selloff. Recent rallies (e.g., 9/19’s 3.06% gain on 109M shares) showed weaker volume conviction compared to the current selloff, reinforcing downside dominance.
Relative Strength Index (RSI)
The 14-day RSI (approx. 51 as of 10/03) retreated from near-overbought conditions (>60 on 10/02) but remains neutral. The absence of oversold readings (<30) despite the sharp drop suggests room for further downside. Crucially, no bullish divergence is present – RSI’s decline aligns with the price drop, lacking evidence of underlying strength. Traders should monitor the $170 support level for potential RSI stabilization.
Fibonacci Retracement
Applying Fibonacci to the rally from the 8/20 low ($142.34) to the 10/02 high ($188.20) shows the 10/03 low ($170.77) precisely testing the 38.2% retracement level ($170.68). This confluence with the September swing low ($169.39) strengthens $170 as critical support. A sustained break below opens the path to the 50% level ($165.27). The 23.6% level ($177.38) now acts as initial resistance, with the 10/03 high ($186.84) rejected near the 0% extension.
Confluence and Divergence Observations
A significant bearish confluence exists at the $170 zone, combining Fibonacci 38.2% support, the September swing low, and psychological support. Bearish confirmation comes from aligned signals: volume-validated breakdown, moving average breach, and momentum indicator deterioration. No material divergences are observed between price and indicators, suggesting synchronized bearish momentum. The convergence of Bollinger Band overshoot and Fibonacci support may catalyze a technical bounce, though RSI neutrality and volume patterns suggest further downside probability to $165.27 if $170 fails.