Palladium futures for March delivery seem unwilling to stop the extraordinary rally in uncharted territory, with the price flying as high as 2,752 on Wednesday after a short consolidation period within the 2,424-2,148 zone.
The higher highs and higher lows remain well intact in the market’s bullish structure, while the shorter-term simple moving averages continue to fluctuate above the longer-term SMAs, all pointing to a stronger uptrend in the coming sessions.
Some stabilization cannot be ruled out as the RSI is flashing overbought conditions. Yet, the indicator has yet to show signs of reversing and the MACD continues to gain momentum above its signal line, both hinting that there might be some extra room for improvement.
On the way up, the bulls would try to close comfortably above 2,600 and the 161.8% Fibonacci of the downside correction from 2,424 to 2,149 to retest the 2,752 peak. Running above its recent top, the metal could search for fresh record high around the 261.8% Fibonacci of 2,874.
Alternatively, traders could wait for a drop below the previous peak of 2,424 in order to reduce exposure in the market. Such a correction could push support towards the 20-day SMA currently at 2,308 and then to 2,200. Still, only a decline below the previous low of 2,148 could raise worries about the uptrend’s strength.
In brief, palladium futures could search for more gains in the short-term if the price manages to climb comfortably above 2,600. A reversal below 2,424 could shift attention to the downside.