The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED. Subscribe or leave a comment as you please. Thank you for reading.
Daily chart shows that price continue to trade below the 20, 100 and 200 dma – indicating further downside at the moment. We favour another flush to the downside and looking to buy dips if permitted.
NFP data is deemed to be worse than expected and it is no surprise that Q1 economic data has been taken negatively. In this new normal, bad data is deemed as good news as it stifles central banks to reduce spending. The show must go on-keeping the tap open on easy policies and money is the addiction of this market. Some are worried when the music will stop while others just continue for there are no alternatives. The herd mentality is “what could go wrong when central banks will bail us out again?”
Worry about liquidity and yield hunting assets continue to be the highlight of the current economic scenario. The VIX index shows no fear while bond yields around the developed economy are rising, other concerns are just temporary or shaft under the carpet. Not much to add here really other than “strap on” and stay cautious as we expect turbulent on the price action.
Nothing has changed as Silver price action continues to bounce on and off the ceiling and floor of this symmetrical triangle. Only a breakout of this range, then a retest of that breakout line – we can then be confident of the next direction. Technically, we will turn bullish on a break above the 200 dma and will place a long to target the trend line at 17.90 levels. A break below will take us to revisit previous low but should see decent rebound from 14.30 -14.50 levels.
We have closed all our Short positions and as shown on the chart above, the green trend line has provided a short term support. Platinum is also trading in a symmetrical triangle, thus the higher low and lower high. A breakout is imminent and NFP could be the catalyst for this move. We are adamant that only a break out of the long term down trend line and trade above 1186 will give the bulls more wings. Meanwhile, we are biased to the downside with a retest of 1086 for a possible double bottom.
Currently, Palladium is trading above 20 and 100 dma which should provide reasonable support in the short term. The next set of resistance stands at 200 dma at 798.05 and Palladium need to break and close above this price level to resume higher. The other indicators are heading higher, giving a semi-bullish stance for more upside. With the RSI rising, MACD showed volume on an up day has certainly boost confidence. A re-test for support at the break of the inverse Head & Shoulder neckline is of no surprise. As long as the IHS is in play, we envisage a target of 840 -850 levels.
Strong support zone remains at 745 to 755 levels and must not be forgotten unless we break above 800 levels. Trade Palladium with care as this metal does not play by the rule.