Palladium way too expensive

[Ganalytics]

Hello all,

I started a blog recently and shared some thoughts about Palladium: https://www.ganalysis.com/palladium-looks-expensive/. My main thesis is that Palladium has just completely detached from any measure of fair value, and it's due for a correction. I don't enter trades based solely on the fundamentals, and Pd has way too much bullish technical momentum right now to try to be a hero and short it, but I'm selling on the first sign of technical weakness.

Anyone have any thoughts?

 

[tomorton]

Interesting, thanks. Something I never look at and I don't do any analysis of this kind.

Are you long Pd?

 

[Ganalytics]

I am not. If you're just following the charts, it looks like a killer trend- so you could try to just ride the wave with tight stops and some caution, but it just seems way too overextended at this point in my view.

 

[tomorton]

Cheers G, but this is a bit curious. you open your analysis with setting out in bullet points why the Pd price has pushed so high, and these seem convincing to my amateur view. But importantly the market, which knows far better than I do, agrees with these and not with your view that price is over-extended (or at least, not yet). The chart shows no signs of weakness.

As you're not long now, were you previously long and where did you exit?

 

[Ganalytics]

Apologies- let me clarify. From a technical analysis/momentum perspective, I totally agree with you. There is nothing indicating an impending reversal.

My argument is that the market is overpricing their concerns, and that's sending prices beyond what I consider "fair value" from a fundamental perspective (i.e. the market is in bubble territory). Basically, the fundamentals are flashing a WARNING signal to me. The market has completely ignored the negative fundamental developments (strengthening dollar, rising rates, huge spread to platinum) and is only concentrating on the supportive narratives.

In terms of how that translates into a trade- I again totally agree that absent a pause or reversal signal, I would not enter the trade, but I am looking for a half-way decent technical signal to enter a short. So, right now I am just on the sidelines, but I'm watching carefully, and I'm ready to jump into a short on a much weaker technical signal than I'd normally require (because of my fundamental perspective).

 

[Ganalytics]

Time to sell- momentum turned, and it's struggled to get over $1200. Short would be invalidated by a close above $1200.

 

[TWI]

Think I would favour Platinum over Palladium at these prices. I believe that Platinum can replace Palladium in Cat converters of gasoline vehicles. Both are subject to any power issues in South Africa which are a continuing problem but I do not think either is a particularly easy trade right now.

 

[Joules MM1]

toppy, if not already, 2755 rotation, risk defined

commercials clearly on the bid (www.timingcharts.com) COT

 

[Joules MM1]

back with the offer
cracking 2544 favours momo to retest the value zone 2277 thru 2240's
front month cfd

the promise of higher highs has seen a decent sentiment swing to bullish in retail sector, no fear at the high

 

[Joules MM1]

appears we have a sell signal after a small leg down price has thus far been weak at rebound

 

[Joules MM1]

proviso; trader should beware the COT shows commercial slightly less than they were committed in Aug 2018 when price took off north in a large impulsive leg

seller beware

 

[LouisaM]

Palladium is now the most valuable of the four major precious metals (gold, silver, platinum, palladium), this metal is in acute shortage that has brought prices to a record high.
The metal shortage has decreased in recent months, causing prices to drop, but automakers, which account for 80% of palladium consumption, have increased purchases of palladium in recent weeks.
This that I just published is from an article from the previous year, but I have not found much information regarding this year.