Checking in on Palladium – A Trade Not An Investment

• Posted by Greg Harmon
• on April 19th, 2012

When you think of Palladium, $PA_F, you think of catalytic converters. Over half of all palladium is used to make them. It is an expensive metal too currently over $600 per ounce. What are its prospects as an investment or a trade? Mixed.

The monthly chart below with Andrew’s Pitchforks applied shows a trend higher between the Median Line and Upper Median Line of the bullish Pitchfork (green) but also following the Upper Median Line lower from the bearish (red) Pitchfork. Other indicators are also mixed as the Relative Strength Index (RSI) is in bullish territory and holding but the Moving Average Convergence Divergence (MACD) indicator is negative and holding. There is no edge on this timeframe.

Shifting to the weekly chart starts to give a sense of a direction. Falling out of the bullish Pitchfork, it is still not near the Hagopian trigger Line to signal an all out. The Bearish Pitchfork is taking control though. And a look at the Fibonacci’s shows that after a retrace of 61.8% of the move higher it has rebounded and is now finding support at a higher high at the 50% retracement level. But there are some mixed indicators here as well with the RSI in bearish territory and trying to move higher while the MACD has crossed negative. No clear bias on this timeframe either.

But when you move in to the daily chart there is an opportunity emerging. on this shorter timeframe the move lower from August through October retraced almost exactly 61.8% before retreating. After finding support near 630 it is now rising with a rising RSI and a MACD that has crossed positive and increasing. The stars are aligned. There is a trade here on a move over the 100 day Simple Moving Average (SMA) at 667.05 with potential up to the 692.60 level against a 655.41 stop.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus