Palantir rallies after last week's beating — here's where sellers could reload

Palantir is trying to snap a five-day losing streak that knocked it over 10% off its record high. But the rebound is entering a potential selling zone where bears could reload.

Palantir ( PLTR ) rose over 5% Monday, narrowly putting it on track for its best day since early September. The rally recovered roughly two-thirds of Friday's decline and brought shares into a potential resistance area around $195–$200.

The blue box captures the slide from Palantir's record closing high to Friday's closing low. The red box marks a recovery of 38.2% to 61.8% of that decline — Fibonacci retracement levels where traders watch for market reversals.

Getting there is progress. Getting through it is the next job.

Buyers have fresh news to work with. Palantir and Knox Systems announced a partnership to accelerate software delivery to federal customers , helping commercial providers meet government security requirements and deploy their applications. Knox says it already supports more than 100 AI and enterprise software applications.

Other software stocks are bouncing, too. Datadog ( DDOG ) and Snowflake ( SNOW ) are rallying strongly, while the iShares Expanded Tech-Software Sector ETF ( IGV ) is rebounding after losing roughly 7% last week.

Palantir was among the record breakouts that recently unraveled across Wall Street . It finally cleared its old record earlier this month, only to surrender the breakout and tumble more than 10%. (We never say an individual stock goes into a correction or bear market.)

Bulls can still turn that around. Pushing through the red box would put the recent highs back in play. Fresh records would undo the failed breakout.

But a downside reversal inside the box followed by another leg lower would strengthen the bearish case, especially if shares undercut Friday's close around $186. Another failed recovery in a leading AI stock would also raise doubts about the broader tech bounce.

Palantir reports Nov. 2 after the bell. After last quarter's 93% revenue growth, investors will be watching whether AI demand can deliver another jump in sales — and another upgrade in management's forecast.

Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com .