Technical Analysis – Palladium futures at fresh record highs; could keep uptrend in short-term

Christina Parthenidou, XM Investment Research Desk

Palladium futures for December delivery are stretching a long-run uptrend within a narrowing channel, with the market printing a new record high of 1,747 on Thursday.

The RSI hints overbought conditions as the indicator seems to be softening above 70, a sign that downside corrections may emerge. Despite that, the triple exponential average oscillator (TRIX), which looks to be reversing north again, suggests that the price may keep the upward direction in the short-term.

Moving higher, the bulls would aim for the ascending trendline currently seen around 1,790, where any breakout could trigger fresh buying, probably towards 1,955.

A downside reversal may initially test the 20-day simple moving average around 1,655 and then rest lower at the 1,595 support level. If the bears manage to pierce the 50-day SMA and the 1,550 level as well, the spotlight will shift to the lower upward-sloping line seen around 1,500, a break of which could step up more selling until the August low of 1,376.

Meanwhile in the medium-term picture the sentiment remains positive as long as the price holds above 1,600. A close under 1,255 would switch the outlook to bearish.

In brief, Palladium futures are expected to see some weakness in the short-term but overall maintain the long-term uptrend.