среда, 21 декабря 2016 г.

PLATINUM TODAY – Prices remain in the doldrums

Short Term:
Medium Term:
Long Term:
Resistances:
R1 926 Oct’16 lows
R2 928 20 DMA
R3 939 DTL
R4 1021 Nov 9 peak
R5 1090 May peak
R6 1195 High so far
R7 1207 H&S target
R8 1289 Jan ’15 peak
Support:
S1 957 61.8% Fibo (2016 rally)
S2 954 June low
S3 9234 20 DMA
S4 911 Feb low/HSL
S5 889 Low so far
S6 811 Jan low
S7 807 Support 2004
S8 745 2008 low
Stochastics:Bearish
Legend:
Fibo = Fibonacci retracement level
DMA = Daily moving average
BB = Bollinger band
(H)SL = (Horizontal) support line
UTL = Up trend line
H&S = Head-and-shoulder pattern

Technical Comment

Analysis

  • The pullback in platinum has been relentless, with prices falling back to levels last seen in February. On December 15, prices moved below recent support, setting a low at $889 per oz. Prices have since rebounded.
  • So again prices may have found support but they are not seeing much follow-through buying. 
  • It would take a move above recent rebound tops at $952 per oz and the DTL at $939 per oz to make the market look less vulnerable.
  • The stochastics remain bearish so for now prices remain vulnerable.

Macro factors

Given stronger industrial metals prices, it is surprising that platinum prices have weakened as much as they have.

November EU passenger vehicle registrations rebounded, rising 5.8%, having been flat in October. This has removed one concern – following October’s data, it did look as though the EU auto market may be slowing down. Growth, however, was seen in all major EU markets in November. In the first eleven months of the year, registrations were up 7.1%. 

Generally strong auto data seems to have been ignored in the second half of the year, with poor jewellery uptake and the gold price weighing on sentiment. 

Another bullish feature is that South Africa’s PGM output fell 12% in the year ending October 2016, according to Statistics South Africa.

We still see platinum as underpriced at these levels. Given a depressed jewellery market, it may take a recovery here before sentiment turns brighter. A pick-up in economic activity may well bode well for jewellery demand down the road. China is the biggest consumer of platinum jewellery – a turnaround in China’s economic outlook may feed through to more spending on luxury items (in time).

The funds’ net long position had become very extended, peaking at 55,949 contracts on August 9. It had dropped to a low of 20,098 contracts by October 25 but was at 25,616 contracts as of December 12. The net long position at 25,616 contracts is in low ground – this year’s range has been 55,949-20,098 contracts. With the gross long and short positions both being cut, it looks as though interest in the metal is waning.

Conclusion

We felt platinum prices had become oversold – they remain so. Prices appeared to have formed a base but there is little appetite to buy.

All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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