пятница, 18 ноября 2016 г.

PLATINUM TODAY – Weak but prices also looking oversold again

Short Term:
Medium Term:
Long Term:
Resistances:
R1 911 DTL
R2 969 20 DMA
R3 1020 June 08 peak
R4 1090 May peak
R5 1195 High so far
R6 1207 H&S target
R7 1289 Jan ’15 peak
Support:
S1 969 20 DMA
S2 957 61.8% Fibo (2016 rally)
S3 954 June low
S4 937 April low/HSL
S5 922.5 Low so far
S6 911 Feb low/HSL
S7 811 Jan low
S8 807 Support 2004
S9 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 prices was relentless between mid-August and mid-October. Spot prices then found support around $926 per oz and rebounded to $1,021 per oz.
  • The rebound appears to have been a bear-flag – prices have since dropped back to test and breach former support at $926 per oz. 
  • The initial sell-off to $926 per oz created an oversold situation – we feel prices are now oversold again. 
  • The upper HSL at $937 per oz has been breached; the lower HSL at $911 per oz remains intact. We would expect good support around $900 per oz.

Macro factors

The South African wage agreements did turn out to be a ‘sell the rumour, buy the fact’ set-up – but not for long. The sell-off in gold and the run-up in the dollar, which has weakened the rand again, have weighed on platinum prices.

Given stronger industrial metals prices, better economic data and strong China, EU and US vehicle sales, it is surprising platinum prices are not strengthening. China’s passenger auto sales were up 20% in October, according to the China Passenger Car Association, and were up 15% in the first ten months. Sales rose 26.1% in September, 24.2% in in August, and 23% in July – these figures are much better than expected. The end of the tax cut on small-engine vehicles at the end of the year may see a swing the other way in 2017 but for now the strong sales should be bullish for PGM demand.

Johnson Matthey expects a 422,000-oz supply deficit in 2016 but the market could return to a surplus in 2017 if investment demand wanes compared with 2016, according to its latest forecast.

With spot platinum prices at a discount of $290 per oz to gold prices, we see platinum prices as underpriced at these levels.

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 it has since climbed to 29,619 contracts. But last week’s increase of 6,479 contracts was driven by short-covering of 8,480 contracts, with the longs liquidating 2,001 contracts. The net long position at 29,619 contracts is in low ground – this year range has been 55,949-20,098 contracts.

Conclusion

We feel platinum prices are oversold again.

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

The post PLATINUM TODAY – Weak but prices also looking oversold again appeared first on The Bullion Desk.



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