The palladium price broke out of its downtrend on the D1 timeframe, indicating that a new trend is forming.
The news from Northam Platinum caused a short-term decline in the price of the white metal. Northam retracted its offer to buy Royal Bafokeng Platinum, attributing it to the low prices of platinum-group metals. This came after the end of a year-long merger conflict with a larger competitor, Impala Platinum.
Northam's decision to give up its pursuit of RBPlat gives Impala (the world's second-largest platinum-group metals producer) new opportunities to strengthen its hold on a mining company with high-quality assets, making it more attractive for a merger.
Impala and Northam increased their stakes in RBPlat to 40.71% and 34.52%, respectively, during the merger conflict.
A potential takeover of RBPlat by Impala Platinum could lead to consolidation in the industry, which in turn could affect supply and demand dynamics in the near future. However, Northam's possible decision to jointly manage RBPlat with Impala could result in new effective strategies. It could positively impact the palladium price in the longer term.
After the price had exited the downtrend on the D1 timeframe, palladium price formed a slowing correction. The fall was halted by the strong support at 1338.00, a pullback from which formed a symmetrical triangle on the H4 timeframe.
On the H1 timeframe, the price is forming the third ascending wave. It will ascend after breaking the top of the first wave at the level of 1501.60. Taking into account the H4 timeframe data (price is in the bottom part of the triangle), the palladium market may change its volatility in the near future, when the price exits the symmetrical triangle pattern. Palladium price is now in a bargain zone.
Signal:
Palladium's short-term outlook is to buy.
The target is at the level of 1620.00.
Part of the profit should be fixed at the level of 1501.60.
A stop-loss should be placed at the level of 1405.00.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
