Palladium Shows Exhaustion Signals
|The price of Palladium in its 4-hour chart could be completing the upward impulsive movement that began on November 11 when it found buyers at $1,678.45 per ounce. Our arguments for expecting a selling position are as follows.
1. The precious metal may be completing a wave ((v)) labeled in black, which is forming an ending diagonal pattern. This structure of completion indicates the likelihood of a potential corrective movement. On the other hand, the US dollar index (DXY) is showing signs of upward reversal, which could drag to the Palladium's price to visit fresh lows.
2. A sell-side position will be active once the price falls and closes below $1,853 per ounce. Our conservative scenario has a bearish target at $1,813.27 per ounce.
3. If the price extends its drops, the Palladium could see new lows at $1,777.75 and $1,742.24 per ounce.
4. The scenario will be invalid if the price exceeds $1,878.31, or if the price penetrates but fails to close below $1,853 per ounce.
5. The risk of our bearish scenario could be a euphoric traders' sentiment that could be interested in boosting the price of the precious metal until the psychological $2,000 level.
Trading Plan Summary
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Entry Level: $1,853.
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Protective Stop: $1,878.31.
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1st Profit Target: $1,813.27.
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2nd Profit Target: $1,777.75.
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3rd Profit Target: $1,742.24.
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