Commodity Chart Of The Day - Platinum
(click image to enlarge)
In the last five weeks, platinum prices have exploded, advancing high to low better than $300/ounce, or just better than 20%. Platinum is a 50 oz. contract, which means the $300 advance equates to $15,000 per futures contract. As one can see on the weekly chart, prices have completed a 61.8% Fibonacci retracement and have already started to back off.
I've suggested in my recent comments that prices will back off and trade back near their 100 day MA. I did this analysis on the daily chart and not the weekly, which you see above, so my prediction would drag prices back near $1480 in the January 13' contract. That represents a drop of 8.5% from current levels.
My opinion is that metals have gotten ahead of themselves and will over correct. The weakness in palladium and platinum that seems to have started should, in theory, spill over to gold and silver. Many metal bugs don't see a correction, but as I've told followers and even clients, that is what makes a market. Longer term, I'm bullish on the entire complex but shorter term, I'd be defensive.
Risk Disclaimer: The opinions contained herein are for general information only and not tailored to any specific investor's needs or investment goals. Any opinions expressed in this article are as of the date indicated. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.