Key Takeaways

Palantir Technologies ( PLTR ) shares gained ground on Tuesday as the stock took a breather from a three-week slump that has seen the AI investor favorite lose more than a third of its market value.

The company, a key software contractor to the U.S. Government, has seen its shares come under significant pressure in recent weeks after a report surfaced last month that the Pentagon plans a reduction in military spending . More recently, broader selling across tech stocks amid tariff uncertainty and talk of a potential recession have dented investor confidence.

Still, some analysts remain bullish on Palantir’s outlook, arguing that the company’s suite of AI-powered analytics software places it in a position to benefit from efforts by the Trump White House to improve government efficiency.

Palantir shares rose 2.2% to close at $78.05 on Tuesday, rebounding from the previous session's 10% decline. The stock has fallen 38% since hitting a record high three weeks ago, but the price is still three times what it was a year ago.

Below, we take a closer look at Palantir’s weekly chart and use technical analysis to identify crucial price levels that investors may be tracking.

Retreat From Record High

After a bearish engulfing pattern signaled a record high in the stock last month, Palantir shares have moved lower on increasing trading volume , with bearish price action continuing into this week.

Despite the recent decline, the relative strength index (RSI) index remains above the key 50 threshold and sits in a location that has generally corresponded with the low of several key retracements on the chart dating back to early 2023.

Let’s identity three crucial support levels to watch amid the potential for further selling, while also pointing out several important overhead areas to monitor during possible upswings.

Crucial Support Levels to Watch

The first lower support level to watch lies around $66. The shares could encounter buying interest in this area near a period of brief consolidation in early November, which also aligns with the mid-January trough.

Further selling may see the shares fall to the $44 level. This location on the chart, currently just below the rising 50-week moving average, could provide support near a range of sideways drift that preceded the stock’s post-election surge.