Palantir Technologies Inc. (PLTR) is consolidating on Tuesday after a rough Monday that saw shares decline nearly 2.5% following a breach of an important support level. The question now: where does this selloff stop?

If the downward momentum continues, there's a decent chance the stock pauses or finds its footing around the $175 level. Here's why that matters.

Understanding Support Levels

Support is essentially a price point where demand kicks in strong enough to absorb selling pressure. Think of it as a zone where buyers step up in force, matching or even outnumbering sellers. That's typically where declines stall out or reverse entirely.

But support levels aren't guarantees. Sometimes when a stock hits support, fresh sellers pile in and overpower the buyers waiting there. That's exactly what happened to Palantir on Monday when the $153 level gave way.

The Pattern of Repeating Support

Here's where it gets interesting: support often reappears at prices that worked before. Looking at the chart, the $153 level provided support back in August and again in late November. That's not a coincidence.

Support levels tend to stick around because of what you might call seller's remorse. Some investors who sold shares around $153 in August watched the price climb afterward and kicked themselves. They decided if they ever got another chance to buy at that same price, they'd take it.

So when the stock drifted back down to $153 in November, these remorseful sellers placed buy orders. That concentration of demand created support at the level once again.

Why $175 Matters Now

The chart also shows that $175 was recently a support level. If shares continue falling and eventually reach this price, there's a solid chance support materializes there again. This could mark the end of the current downtrend.

Palantir might even reverse direction and start rallying from that level. Stocks can bounce off support when impatient buyers start competing with each other, bidding prices higher in the process. That competitive dynamic can flip a stock into an uptrend, and it's entirely possible here.

Whether $175 holds or breaks will tell us a lot about where Palantir heads next.