North American Palladium, Hidden Diamond

Chart has a lot of patterns that are recognizable. One pattern that you might have missed is the Diamond Top pattern.

Diamond Top Trading Tips

Trading Tactic Explanation

Price trend If price makes a quick, nearly vertical rise (A) leading to the diamond and the breakout is downward, expect price to drop back to the price at which it started (B) the rise. Also, price must have something to reverse. Diamonds with short-term (less than three months) price trends leading to the diamond perform best post breakout.

Price velocity High velocity moves after the pattern often follow high velocity moves leading to the pattern.

Volume trend A rising volume trend results in the best post breakout performance.

Throwbacks and pullbacks Throwbacks and pullbacks hurt post breakout performance.
Other Diamond example

With this Diamond, if the pattern does expand and contract elongating the Diamond, I would suspect a throwback would occur.

I also used the cloning technique from nmike https://www.tradingview.com/u/nmike/ The bottom of the diamond pattern (B), matched up with the breakaway gap (Ref) near the 52 low. I suspect these clones to be measured future support/resistance .

If you scroll back in the chart you will notice a falling wedge pattern and even further back from the $8 is a flag and pennant .

You might also want to take note of open interest on the calendar spreads. Compared to companies relative small size and limitedness of acess to the palladium-platinum market, this stock has a big draw for option traders.

About PAL

North American Palladium (ticker: PAL) is a precious metals mining company, operating in Canada. It has been operating its flagship mine Lac Des Iles ( LDI ) in Ontario, Canada since 1993. LDI is one of only two primary producers in the world, as palladium usually comes as a by-product of other metals ( platinum or nickel). PAL also operates the Vezza Gold mine, which is located in the Abitibi region of Quebec.

The company is currently undergoing a major expansion to increase production and reduce cash costs per ounce. The goal is to reach annual production of 250.000 ounces of Palladium in Q3 2015 at a cash cost in the low $200s. Palladium is currently trading around $740/oz, and the outlook remains positive for 2013.


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