In our annual palladium price forecast we featured the quarterly chart included in this article. Our price target for 2020 was either $2500 or $1300. The market clearly went up, and our forecasted price target is met. Is this a time to add to positions or take profits? The answer by looking at the longest timeframes is clear: take profits, now.
Congratulations for those who remained loyal to the palladium market. In full transparency we were shaken out of our positions when this brutal sell-off took place a year ago in March. In our article Palladium Crash Of 2019 Has More Legs? we showed the monthly palladium chart which clearly broke down after the sell off.
A week later though we followed up with the quarterly chart, the longest timeframe. We wrote in Palladium: The Message Of The Quarterly Chart this quote:
The lower timeframes show a breakdown in the meantime. A divergence between timeframes suggests we need to closely watch how it resolves. The lower timeframes should be provide more detail while the higher timeframe might have a dominant trend.
A divergence between the highest timeframes are very annoying, and difficult to handle.
We solved this ‘issue’ in our recent palladium forecast by identifying $1,650 as an important pivot point.
From a risk management perspective pivot points need to be respected because they can go either way. In case price goes against our forecast we don’t want to end up at the wrong side of the trade. So that’s why we identified $1,650 as the ‘capitulation’ point. If palladium falls below $1,650 in 2020 we know that it is headed for $1,300. However if palladium rises above $1,875 we know it is headed for the most bullish outcome which is $2,500 in 2020 or 2021.
The palladium market went up, and was not weak at the pivot point.
Right now with palladium testing the top of the longest term channel we want to be out of this market. Take profits, no hard feelings, and rotate into other opportunities.
Yes there are other opportunities out there, especially elsewhere in precious metals. Our research shows that There Is Always A Bull Market In One Of The 4 Precious Metals.
Currently the gold market is offering smart investors great opportunities at this point in time. That’s why we suggested 2 gold positions in this week’s Momentum Investing alert. One is an aggressive breakout play, and the other one is a secular breakout play. Both are absolutely gorgeous, and you too can have instant access to these tips by becoming a member here.