Bearish divergence evident on Palladium Spot price $XPDUSD

Palladium has had a run that can be described as nothing short of extravagant. Since bottoming out recently on the 16th August 2018, we have seen the price rally from $833 to the current high of $1615. To put it into perspective, that means the palladium price has basically doubled in a space of 7 months. With the recent inversion of the yield curve and markets taking a breather on Friday, we have seen the Palladium price come off +-3% in the form of a massive bearish engulfing candle. What is also interesting to note is that we are seeing bearish divergence where the RSI indicator has formed a lower high, not confirming the higher high in the spot price of Palladium. These kind of divergences can often result in quite a strong correction in price. Although i am by no means trying to call a top to this parabolic move (which is dangerous), i think the chart is finally starting to show some signs of caution. Also if you look at the weekly we have formed a massive weekly reversal candle which could further add conviction to this bearish call. I would prefer to see the recent daily closing lows of $1516-$1517 taken out to be fully comfortable an interim top is in place. If anything, caution is advised chasing this extreme move. Perhaps we also start to see the local platinum miners on the JSE consolidate their recent strong moves $JSEAMS $JSENHM $JSEIMP

Comment:

this call worked exceptionally well together with a correction in the platinum miners. Technically looks like the parabolic nature of this trend is now broken, but will price need to now consolidate before any further downside appears