By Doug Busch
Earnings reports from two major players in the software arena -- Palantir and Uber -- are helping to fuel the iShares Expanded Tech-Software Sector exchange-traded fund's momentum this week.
The ETF is heading for its first four-week winning streak since last August/September. It ended last year and started this one in a deep hole, succumbing to fears that artificial intelligence could displace software.
The group's comeback is partially responsible for technology being the best-performing S&P 500 sector out of 11 by a mile over the past month, with the State Street Technology Select Sector SPDR ETF up 24% and higher in 24 of the last 26 sessions. The next nearest competitor is consumer discretionary, up 9%.
For the software group to sustain a broader recovery, participation from former leaders like Uber and Palantir, will be essential. Their stock charts warrant closer looks.
Palantir
Looking at Palantir's chart, round number theory came into play at the $200 level with only two closes above that figure on Oct. 31 and Nov. 3. The stock also climbed above the figure and filled the upside gap on Dec. 22 before it started trading lower, now sitting 36% below its 52-week high.
Notice how the stock has lagged behind its software peers on the ratio chart since the start of the year against the tech-software sector ETF. Palantir recorded a bearish death cross when the 50-day simple moving average crossed below the 200-day simple moving average in late February. That tends to occur after most of the damage has been done.
On a bright note, Palantir has shown bullish relative strength index $(RSI)$ divergence -- a signal that downward momentum is waning.
The stock is trading back in the $125-$130 range where some bullish price memory -- where the stock price used to trade "has traded in the past since April" -- exists, indicated by several positive candlesticks. It started with a bullish harami on Feb. 6, a morning star on Feb. 17, and then three separate dojis on Feb. 24, April 10, and May 6. A purchase near $135 makes sense. The stock could reach $165 in the second half of this year, representing a 28% gain from current prices. Remain bullish above $125.
Palantir was trading around $139 Thursday.
Uber
Uber's daily chart shows it has been acting strongly against software rivals since December. Uber also demonstrated bullish RSI divergence in February and March. On the week, Uber is up 5.4% headed into Thursday, while the IGV ETF is up 1.4%.
Round number theory came into play at the $100 figure with a bearish shooting star on Sept. 22, followed by a bearish dark cloud cover and two bearish engulfing candles in October. A bearish death cross registered in early January. Uber now trades 22% below its 52-week high.
The stock has formed a bullish inverse head and shoulders pattern, featuring positive candles at the pattern's base, including bullish engulfing candles on Feb. 18 and April 13. A bullish harami was completed on March 30.
The $80 level has price memory acting as resistance. The area was support last May, November, and December. A break above $80 should lead to a quick move toward $92 in the short term, a 16% gain from current prices. Remain bullish above $73.
Uber was trading around $77 Thursday.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 07, 2026 14:15 ET (18:15 GMT)
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