Palantir Technologies (PLTR) - Bearish Idea

Palantir is currently breaking down from a clear distribution pattern, failing to reclaim previous highs and showing signs of a macro-driven top. The chart highlights a series of lower highs, breakdown of rising trendline support premarket, and increasing downside momentum.

From a fundamental standpoint, Palantir is still trading at an exceptionally high valuation:

P/E (TTM): ~350
Forward P/E: ~130
Valuation far exceeds even the average Nasdaq tech stock

In the context of a shifting macro environment:

Trade war escalations and tariffs are increasing pressure on the tech sector, particularly AI-driven companies like Palantir that depend on high-performance chips.
Rising inflation risk, combined with persistent interest rates, is likely to continue pushing investor sentiment away from overvalued growth stocks.
Broader market rotation from risk-on to risk-off suggests capital will exit speculative names.

From a technical perspective:

Trendline support has broken premarket
There is a deeper demand zone between $14–18, which coincides with volume shelf and pre-hype accumulation range

This is not a call for an immediate collapse, but rather the beginning of a macro-level revaluation process. Short-term bounces are to be expected, but the overall trend appears to be decisively down unless strong macro or fundamental catalysts reappear.

Target zone: $14–18
Stop invalidation: Weekly close above $103

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Disclaimer: This is not financial advice. The content reflects a personal market view and is intended for educational purposes only. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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Update – Yuan Devaluation Could Accelerate Downside

China has just allowed the yuan to weaken to its lowest level since 2023 in response to the new U.S. tariffs. Historically, this move signals escalation in trade tensions — and often precedes major market volatility.

If this continues, it could tip the U.S. into a stagflationary environment: rising import costs (from tariffs), disrupted supply chains, and slowing growth. That’s a toxic mix for overvalued tech stocks.

Palantir, with its high P/E, government contract exposure, and AI chip reliance, remains highly vulnerable in such a macro backdrop. The bigger the macro storm, the more fragile risk-on names become.

Note

Update – April 9, 2025: Trade War Escalation Intensifies

The trade war between the U.S. and China has sharply escalated. President Trump imposed a 104% tariff on Chinese imports, and China has responded by raising its retaliatory tariffs to 84%, set to take effect April 10. The European Union is also preparing its own 25% counter-tariffs.

This level of global trade hostility is a major threat to tech stocks. Palantir, with its high exposure to government spending and reliance on sensitive AI infrastructure, faces an increasingly hostile macro backdrop:

- Tariffs raise costs for advanced semiconductors and cloud infrastructure.
- U.S. defense budget uncertainty clouds contract visibility.
- Risk-off sentiment grows stronger by the day, making high P/E names highly vulnerable.

As global markets react to these tensions, Palantir's valuation and macro sensitivity make it a likely casualty in any extended correction.

Note

Update – April 9, 2025: Tariff Adjustments and Market Response

President Trump has announced a 90-day pause on increased tariffs for most countries, lowering them to a baseline of 10%. However, tariffs on Chinese imports have been sharply raised to 125%, intensifying trade tensions with Beijing.

Implications:

- While this partial easing boosted broader market sentiment (with the S&P 500 rallying ~7%), the targeted action against China still presents significant macro risk.
- For Palantir, this means indirect supply chain stress (via tech components) remains, and the broader geopolitical landscape is still deteriorating.
- Any renewed volatility or escalation could resume or amplify downside pressure on risk-on assets like PLTR.

Continue monitoring for both macro whiplash and any upcoming Fed or China responses.

Note

Update – April 10, 2025: Relief Rally Mirrors Historical Tops

The recent sharp rebound in PLTR (+19%) fits the classic definition of a relief rally within a Megaphone Top, a historically bearish formation marked by increasing volatility, erratic price action and a lack of trend control.

What Is a Megaphone Top?
A Megaphone Top is a bearish reversal pattern characterized by:
- Higher highs and lower lows
- Increasing amplitude in price swings
- Chaotic, widening volatility as the market becomes unstable

It reflects indecision, loss of trend control, and often precede strong downward breaks when support finally collapses.

Market Psychology Behind It
- Early bulls push price up → higher highs
- Each correction dips deeper → lower lows
- Volume often spikes erratically
- Eventually, bulls get exhausted and a breakdown below key support signals capitulation

This is classic of late-cycle distribution as smart money offloads shares into increasingly euphoric upswings.

This same type of pattern appeared during the 1987 crash and dot-com bust, where temporary pops were followed by steep declines. The current structure reflects instability, not strength:

- Price action remains within an expanding wedge
- No fundamental catalyst supports a revaluation
- Volatility and amplitude are increasing — signs of exhaustion, not accumulation

Unless PLTR can reclaim prior highs and consolidate above them on strong volume, this rally is likely to fade and trap late buyers. The broader macro picture reinforces the bear case.

Note

Update – April 11, 2025: China Strikes Back with 125% Tariffs

China has now retaliated by imposing 125% tariffs on U.S. goods, starting April 12. The U.S. confirmed a total effective tariff rate of 145% on Chinese imports.

This marks a new phase in the trade war, with both sides firmly entrenched. Beijing has stated, "there is no longer a market for U.S. goods imported into China."

Implications:

- Negotiation window has collapsed — trade war is now fully escalated
- Retaliatory risks for U.S. tech, semiconductors, and AI firms increase
- Palantir remains vulnerable due to its reliance on U.S. federal contracts, AI infrastructure, and valuation risk

With Goldman Sachs cutting China's GDP forecast to 4% and global demand weakening, the macro bear thesis continues to gain strength. This is not the time to chase relief rallies.

Note

Update – April 12, 2025: Market Dislocations Deepen Amid Tariff Turmoil

This week has witnessed significant market disruptions, with traditional safe-haven assets exhibiting unusual behavior:

- Treasury Market Turmoil: U.S. Treasury yields have surged, with the 10-year yield reaching 4.5% and the 30-year yield nearing 5%. This spike is attributed to foreign investors reducing their holdings, inflation concerns, and the unwinding of leveraged hedge fund positions.

- Dollar Weakness: The U.S. dollar has declined, reflecting diminished confidence in U.S. assets amid escalating trade tensions.

- Gold's Record High: Gold prices have soared to an all-time high of $3,244.33 per ounce, as investors seek refuge from market volatility.

- Equity Market Resilience: Despite these disruptions, major stock indices have shown resilience, with the S&P 500 posting significant gains. However, this divergence raises concerns about underlying market stability.

Relevance to Palantir (PLTR):
While broader equity markets appear resilient on the surface, defensive positioning is clearly underway beneath — from gold inflows to bond market stress. PLTR, as a high-beta, high-valuation growth stock, is especially sensitive to the types of liquidity crunches and capital rotations we’re starting to see. The warning signs across macro markets should not be ignored.

Note

Update – April 12, 2025: Technical Breakdown

Price is compressing within a megaphone structure following a parabolic run-up. This pattern often signals rising volatility and eventual directional resolution — and if support breaks, it could trigger a measured move toward much lower levels.

Key zones to watch:
• $50–52 – The Golden 0.618 Fib retracement, aligned with a major psychological round number
• ~$42 – First major gap fill from November 2024, lining up with the 2021 ATH and forming a technical magnet
• ~$30 & ~$25 – Two other gaps to keep an eye on.

A break below $63 could accelerate downside as liquidity dries up and macro risk (trade war, inflation, Fed uncertainty) intensifies.

The megaphone's projected breakdown target extrapolates toward the previously defined Target Zone between $21–14, which aligns with:

• A fairer fundamental valuation based on P/E compression
• The high-volume accumulation zone from 2023

Still a long way from "value" with P/E currently near 390. The lower zones may offer better long-term entries if the broader macro picture deteriorates further.

Volatility is high — risk management is crucial. Until a clear trend reversal forms, this remains a chart to watch closely for continuation or capitulation.

This is a scenario projection, not an immediate forecast. Breakdown confirmation is still pending — but the technical roadmap is becoming clearer.

Note

Update – April 13, 2025: Trend Channel & Tariff Relief

Here we have another interesting perspective

PLTR is currently trading within a clearly defined descending channel, with multiple touchpoints confirming both the upper and lower trendlines. The price is now testing the upper boundary again, historically a rejection zone. Unless there’s a high-volume breakout or strong bullish structure, the likely scenario remains a retest of the midline or even the lower channel boundary.

On the macro front, the White House issued key exemptions to the recently imposed tariffs, excluding smartphones, computers, and semiconductors. This provides near-term relief to tech giants like Apple, NVIDIA, and Intel, and could stabilize tech sentiment after recent market whiplash.

However, this exemption appears transitional and politically motivated to allow for onshoring of tech manufacturing. The broader picture remains volatile: liquidity is thinning, yields are spiking, and core macro pressures — stagflationary risk, trade tensions, and systemic stress — remain unresolved.

This does suggest increased short-term volatility, with markets likely to weigh this shift when they reopen on Monday.

Note

Update – April 14, 2025: Bear Flag Structure Observed

A potential bear flag pattern is forming on the 4H chart after a sharp leg down. The consolidation structure shows a rising parallel channel, typical of a corrective phase after an impulsive sell-off.

If the flag breaks down, the measured move suggests a target around the $27–28 range, which coincides with previously identified support and aligns with broader macro risk.

Bear flags are continuation patterns and often lead to further downside once support breaks. Until that happens, the pattern remains in development.

This scenario reinforces our primary thesis while offering a shorter-term technical roadmap for potential price action.

Watch levels:

• Flag support (approx. $75–76)
• Breakdown confirmation: close below lower boundary with volume
• Upside invalidation: strong breakout and close above $103 with follow-through

Volatility is high — risk management remains critical.

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Final Note

It’s been fun covering this bearish perspective on PLTR and the latest macro developments. I genuinely hope it brought some value to you all in the community. I don’t have a crystal ball — no one does. But by sharing our unique perspectives, we can help each other sharpen our understanding and learn together.

Wishing all traders the best of luck with your trades. Stay conscious — volatility is likely to remain high, and conditions can shift rapidly.

Trade smart, stay humble, and keep learning.

Disclaimer: This is not financial advice. The content shared here is for educational and informational purposes only. Always do your own research and consult with a professional before making any investment decisions.

Note

Update – April 16, 2025: Rising Wedge Within the Bear Flag

This chart is a snapshot from this morning, 10:26 UTC+2. It includes extended hours premarket action, where we identified a Rising Wedge formation within the larger Bear Flag structure.

The wedge showed a typical pattern of weakening momentum, testing the flag resistance as well as the previously broken long-term trendline, but failing to break through.

As of now, the pattern appears to be playing out as expected, with price spilling out of the wedge, heading lower toward the flag support. A clean break below that level would likely trigger the next leg down.

Note

Macro Update – Fed Trapped by Trade Shock

Jerome Powell's latest comments confirmed what we’ve been anticipating: the Fed is stuck. They’re acknowledging that tariffs are adding inflation pressure while also threatening growth, a setup that leaves them with no good options.

They can’t cut rates without risking a dollar devaluation and loss of confidence, and they can’t hike without risking a credit event or deeper recession. As a result, they’re left waiting until something breaks and that’s the key point.

This indecision leaves risk assets vulnerable, particularly overvalued tech with stretched multiples and high beta.

In short, the Fed is sidelined, inflation risks remain, liquidity is thinning, and markets are on their own, a perfect storm for deeper revaluation.

Note

Narrative vs. Reality – April 24, 2025

While the White House continues to float optimistic headlines suggesting trade negotiations with China are underway, Beijing has directly denied any such talks are taking place.

This growing disconnect between political headlines and actual diplomacy looks increasingly like an attempt to calm markets and stabilize the bond market, which is showing signs of stress.

Yields are rising, auctions are heavy, and confidence is thinning. Promoting hope of de-escalation may offer temporary support, but if the narrative collapses under scrutiny, the fallout could be sharp.

This reinforces our core thesis: markets are fragile, liquidity is drying up, and macro pressures are building while investor sentiment is stretched thin. Expect volatility and prepare accordingly.

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