Palantir’s stock dropped by 3.5% on Friday and continued to fall by more than 2% in premarket trading. This decline is partly due to fears of a possible trade war between the US and Europe. The overall outlook for the stock is currently shaky, leading to ongoing drops. Right now, Palantir is trading within an upward-sloping parallel channel, which many see as a bearish sign. If it breaks down from this channel, the stock could plummet further, possibly hitting about $147. This level is important because it may act as a point where the price stabilizes amid increasing selling pressure. As a publicly traded company, Palantir often faces ups and downs from economic events and technical trends. Because of this volatility, it’s crucial to closely monitor the charts and not let emotions guide decisions. Effective risk management is essential in this situation. It requires setting clear levels, recognizing invalidation points, and avoiding the assumption of a rebound just because of past declines. Keeping an eye on chart signals helps in making decisions based on objective insights. Last year, we saw how fragile Palantir’s stock sentiment was when fears of a US-Europe trade war led to a drop. These worries are growing again, especially after the US Commerce Department announced a review of digital services taxes last week. Recent data from Eurostat, showing a 5% decline in US tech imports for Q4 2025, suggests these fears are impacting the numbers. Technically, the upward-sloping parallel channel that we observed in 2025 remains a key pattern on the chart. This structure is still viewed as bearish, and the stock is testing its lower boundary again. A break below the crucial support level around $158 would signal the start of a major downward move. Given this situation, we should consider buying put options to hedge against or bet on further declines. March or April expiries would offer enough time for this pattern to play out, especially since breakdowns can sometimes lead to a brief retest of the support level that was broken. The implied volatility is now high at around 45%, showing the market’s growing concerns over trade policies. For a more controlled risk approach, a bear put spread makes sense to mitigate some of the high costs. We could buy a put option near the current price and sell another put at the $147 target level. This strategy profits if the channel breaks and the price moves toward that key level we identified last year. Looking back at the AI-related volatility in mid-2024 illustrates how quickly Palantir’s stock can change due to macroeconomic shifts. During that time, we saw swings of over 15% in just weeks. Using options allows us to position for similar movements without the unlimited risks that come with shorting the stock directly.

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