While we remained bullish on the precious metal's sector when it took a beating towards the end of 2008 to early 2009, instead of pushing Gold or silver our main focus was on Palladium. The reason, it was the single most ignored precious metal out there. Mass psychology dictates that when a market has taken a massive beating, makes for a good investment and is being completely overlooked by the masses, the astute investor should aggressively start building up a position. When it was trading close to its lows, we even stated that it made for a better opportunity than Silver (that advantage is now over). This position appears to have paid off for Palladium has outperformed all the precious metals; from low to high Palladium tacked on over 155% making it the best performing precious metal in the past 12-13 months. From low to high Silver tacked on 120% and Gold from low to high tacked on roughly 80%.

Palladium has tested the 180 price point level several times over the course of the last 6 months and to date this zone has held and in doing so has flashed several very strong positive divergence signals, and two long term buy signals. From a short term and 3-6 month perspective, one can expect the action to remain very volatile, but from a 1-2 year perspective, Palladium is trading at an insanely cheap level; investors will only realise this later, but by then it will be too late to act.

Palladium is a very volatile metal and when it moves the moves are usually explosive in nature; this downward move has created an unbelievable long term buying opportunity for all those who failed to open up long positions in bullion when it was trading at these levels from Oct 2004 to July 2005.

On the short to intermediate time frames, palladiums strength will be determined by how it responds to the corrections in the Gold and Silver markets. If during this corrective phase Palladium can hold above 180 even if Gold trades down to the 720-750 ranges, then it would be very strong sign that an explosive move upwards is not too far off in the makings. Expect this market one day to move in bursts of 30-50 dollars a day. If you have no position in bullion, now would be a great time to add to your positions and continue to add to them on all pull backs. Market update March 10, 2009

We also published the above info publicly on the 30th of March 2009 Full article. Almost everything that was stated in the article has come to pass.

It is also the only precious metal that did not immediately pull back when the dollar started to rally this year. For awhile it actually traded in tandem with the dollar and went on to put in a several new highs before pulling back.

We made the following comments on Jan 5th, 2010 to our market update subscribers.

Having traded past 400 on a weekly basis, it could potentially spike to 450 before pulling back. Focusing on the short to intermediate term time frames, Palladium is now overbought, and so it is ready for a pullback. Now is not the time to open up new positions. If you have no positions wait for a strong pull back before deploying new money into this play.

It subsequently traded to and surpassed the 450 mark. The next step now is for a pullback as Palladium has mounted a very strong rally and once the correction gathers steam we will be in a better position to determine which precious metal will be the next top performer. A break below 420 for 3 days in a row should take it down to the 380 ranges. A weekly close below the 350-360 ranges has the potential to take it down all the way to the 280-300 ranges; this is also roughly the zone the main uptrend line runs through.

From a long term perspective, all strong pull backs in the precious metal's sector (Gold, Platinum, Palladium and Silver) should be viewed as buying opportunities.

"Keep away from small people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great." ~ Mark Twain, 1835-1910, American Humorist, Writer

by Sol Palha

www.tacticalinvestor.com

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of the market. He and his partners are on the web at www.tacticalinvestor.com.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.