Palantir stock falls to $190 as Michael Burry short bet sparks profit-taking after record rally

Traders Union
All News
Financial News
Palantir Michael Burry short

Highlights

- Palantir drops to 190 after Michael Burry reveals bearish position against the stock.

- Shares had surged more than 170% year-to-date before this week’s reversal.

- Valuation at 250x forward earnings sparks concerns of overextension despite strong guidance.

The timing of Burry’s filing added to the market’s nervousness. Just days earlier, Palantir had reported another strong quarterly update, guiding fourth-quarter revenue above Wall Street estimates. Instead of lifting shares higher, the news prompted traders to lock in gains, confirming that sentiment had reached an inflection point after months of uninterrupted gains.

Overbought structure triggers channel rejection

On the charts, Palantir’s rally reached the upper boundary of its long-term ascending price channel, which has guided the uptrend for nearly two years. The rejection near $210–$215 aligned with the Parabolic SAR flip and a historical supply pocket, producing a sharp reversal candle on the daily chart.

Palantir stock price dynamics (Source: TradingView)

Price is now attempting to stabilize near the 20-day exponential moving average (EMA) at $187.80, a level that has served as dynamic support throughout the year. A daily close below that zone would expose the 50-day EMA at $178.46, which overlaps with the prior breakout level from September. A confirmed breakdown below that area would mark the first meaningful trend shift in months and bring the 100-day EMA at $164.04 into focus.

Despite the correction, the long-term structure remains intact. The stock has yet to retest its mid-channel trendline near $175, where dip buyers have consistently entered during prior pullbacks. A move toward that region would not break the trend but rather normalize it after an extended period of vertical price action.

Valuation concerns rise as sentiment splits

Palantir’s valuation has become a key talking point among investors. At roughly 250 times forward earnings, the stock trades at one of the steepest multiples among large-cap technology names. By comparison, Nvidia trades near 33x and Microsoft around 29.9x, leaving Palantir with virtually no margin for execution risk.

Still, the company continues to post accelerating revenue growth, and retail participation remains elevated. According to market data, Palantir ranks among the top three U.S. equities in daily retail turnover, averaging around $302 million per day. This dynamic has created a volatile tug-of-war between institutional profit-taking and retail conviction.

The bearish signal from a prominent investor like Burry has intensified debate over whether the rally had run too far. While long-term bulls view the correction as a healthy cooldown within an ongoing uptrend, value-driven funds see room for further compression as earnings multiples revert closer to sector norms.

Outlook and key levels to watch

Immediate support sits at $187–$188, coinciding with the 20-day EMA. A break below that level opens the path toward $178–$180, aligning with the 50-day EMA and prior breakout structure.

If that zone fails, deeper support emerges near $164, where the 100-day EMA and mid-channel trendline converge. On the upside, resistance remains at $210–$215, marking the channel ceiling that capped the recent run.

Previously, we noted that Palantir’s parabolic advance was approaching a technical exhaustion point as valuations and retail speculation surged. The latest reversal confirms that pattern, with the stock now undergoing a natural cooling phase within its broader uptrend. As long as price holds above the mid-channel trendline, the structure remains constructive — but a close below $178 would signal a shift toward deeper consolidation.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.