Technical Analysis – Palladium – Looking oversold – or is it?

Otmane El Rhazi from The Bullion Desk.

Short Term: Medium Term: Long Term: Resistances: R1 752 Former support R2 803 Recent high R3 833 March high R4 850-864 R5 896 R6 911.50 August peak Support: S1 754 61.8% Fibo S2 755 April 22 low S3 746 Jan low S4 731 Low so far S5 729 Oct low S6 724 Mar low S7 696 2014 low Stochastics:Bearish Legend: MACD = Moving average convergence divergence Fibo = Fibonacci retracement line SL = Support line/level BB = Bollinger band Technical Comment Analysis Palladium prices have sunk back to oversold levels – prices are in the area that has previously seen downward spikes. The March sell-off saw prices hold below $740 for a couple of days but there have been few closes below $740 since March 2014.  That said, a look at this weekly chart shows that prices are now back in the middle of the trading range that was in place before the early-2014 rally that was triggered by South African strikes. So perhaps the market is not that oversold in the big picture. The stochastics and MACD remain bearish so we would not get too bullish just yet. But with prices in oversold territory basis a daily chart (not shown), a rebound could get going at any time.  We wait to see if the March low holds; if it does not, we would look for support around $680.   Conclusion The market looks weak and vulnerable but former spikes in this area suggests there may be strong support between here and $720. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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