Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: Palladium has been on fire lately and this precious metal has risen to all-time highs. However, the current uptrend bears resemblance to the 2001 bubble.
Since we are in uncharted territory we can only try to extrapolate the current move using Fibonacci. With February's massive move palladium has reached 100% of first move 2016-2018. A minor correction could be expected before a final push towards 1.382 extension at around $1,757/oz but a move towards 1,618 or even 1,764 extension is not unlikely ie. to $1,918 - $2.000+ per ounce. Bottom line: there is nothing from a technical point of view and the uptrend is over. It is a bubble and one should trade with extreme caution. That is likely to hurt automated traders in particular.
As mentioned by our commodities expert Ole S. Hansen in this excellent piece it could be a good idea to look for an alternative to palladium – platinum.
Platinum has been lagging palladium but now seems to be on the move. The $780/oz level seemed to be too strong to break. Bears got rejected several times since December 2018. Last week platinum broke out of its descending triangle like pattern . RSI is above 60 ie. bullish indication.
The bullish breakout picture would be demolished if platinum drops back below the falling trendline. However, do expect it to be tested from the upside this often occurs after a break out like this.
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