The Palladium market has seen quite a bit of downward pressure for some time now, unlike its cousin, silver. This is due to the fact that Palladium is used quite a bit for fuel cells to power a large host of things including cars and buses. Furthermore, the Palladium market is greatly influenced by demand for catalytic converters, so obviously there is a huge auto industry influence.
As the world continues to slow down economically, it does make quite a bit of sense the Palladium continues to lose its luster. The $1350 level underneath has been significant support recently, and it appears that we are drifting toward an area again. You can make a little bit of an argument for something akin to a parish flag, but ultimately it looks like if we break down below the $1350 level, the market is likely to continue dropping rather significantly.
What makes this downtrend particularly interesting is that it has been so slow and steady. It’s been like a “slow moving train wreck” for several months. There’s only been a couple of days where it is sold off quite viciously, and it has been a very easy short to hang onto. As long as his attitude continues, it makes a great opportunity for short sellers to take advantage of small bounces that show signs of exhaustion.
As far as buying is concerned, the market probably needs to take out the $1635 level at the very least, which was the most recent swing high. If we can break above there, the market could then go looking to the 200-Day EMA, which sits near the $1725 level. Any move above there technically makes this an uptrend. Having said that, the recent price action has been so bearish that it’s difficult to try to imagine going long in the Palladium market currently. This will be especially true if economic conditions continue to deteriorate going forward.
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