PALL (palladium ETF) offers an objective short entry on this bounce back to the 180.43 former support, now resistance level with /PA (futures) also testing the 1885 resistance level from below. As such, PALL will be added as an Active Short Swing Trade around current levels with an optimal entry price between 177-182.60 but not above.
PALL 60m Dec 27th
The price targets are T1 at 170.91, T2 at 165.91, and T3 at 160.40 with the potential for additional targets, depending on how the charts of both palladium & the stock market develop going forward. The suggested stop, assuming an entry around current levels & targeting T3, is 184.70. The suggested beta-adjusted position size for this trade is 0.85. The RSOTC position size calculator can be viewed by clicking on the calculator icon on the top menu of the site or by clicking here.
While official trade ideas are always ETFs, ETNs, or individual stocks, for those that prefer trading palladium futures, /PA offers an objective short entry on this backtest of the former 1885 support (now resistance) with a stop somewhat above to allow for a possible stop-clearing pop above 1885 before the next leg down begins. Also, note that a short on /PA will have a much better chance of playing out if /NQ & /ES trigger sell signals via breakdowns on the 60-minute charts soon as palladium has been trading much more correlated to the stock market & future economic growth expectations than the other precious metals, including the closely related platinum.
PA 60m Dec 27th
The 1800.60 & 1742.28 levels on the chart above are unadjusted price targets, i.e.- the actual support levels where a reaction is likely. My preference is to cover short positions slightly above the support level at which a reaction is likely on the initial tag from above. Also, note that my 1800 target was already recently hit on the impulsive leg down following the break of the 1885 support level. As such, that was the “initial reaction” I was expecting off that level and therefore, should /PA reverse & start another leg down soon, it is quite likely that the 1800 support level will produce little to no reaction on the next tag from above.