Palladium Technical Analysis: Second Attempt After Plummeting 14% in Under Two Days
Palladium futures have recently experienced a significant drop, marking one of the sharpest declines in a short period. After reaching a 50-week peak of 1,695 on Thursday, October 16, and hitting 1,692.5 the following day, prices crumbled to 1,510.5 by the end of that Friday—a staggering 9.68% decline in just one day.
Within a day and a half, palladium plunged over 14%, igniting inquiries among traders: Is this a precursor to a deeper downturn, or could it signal a potential turnaround?
Currently, prices are hovering around the 1,500 mark, a crucial psychological threshold where buyers and sellers are testing their convictions. This rapid and steep decline is quite unusual for palladium, and everyone’s focused on whether it can stabilize and find a footing above significant levels.
Before diving into the order flow perspective, exploring a more comprehensive analysis of palladium’s technical state would be beneficial.
Order Flow Insight
According to our order flow analysis, which monitors buyer and seller activity at different price points, it appears that forced sales are being absorbed near lower value areas. Even with a noticeable increase in selling pressure, the price trend has ceased to set new lows, hinting that sellers may be losing their grip.
This suggests that buyers are quietly taking in supply around the bids, while sellers continue to market without significantly slashing prices. Such a divergence between trading volume and price movement often points to early accumulation instead of ongoing liquidation.
Main Technical Highlights
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Points of Control (POC): 1,489 — This is a vital short-term reference, acting as a dividing line between bullish and bearish sentiments.
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Value area lower limit (VAL): 1,477 — This area serves as the first layer of structural support, confirmed by current low sessions.
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VWAP: 1,501.5 — Prices are fluctuating just below this volume-weighted average, close to the psychological barrier of 1,500. If the price can remain above this, the chances for a bullish rebound increase.
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High-value area (VAH): 1,512 — A critical threshold for breakout. Beyond this, the path can open towards the first upper VWAP deviation between 1,520 and 1,535.
Why the Bias Seems Bullish
Although the wider market is still processing the recent selloff, our order flow analysis indicates that buyers are absorbing aggressive selling pressure around 1,477-1,489.
This relationship between delta and volume reveals that while sellers remain active, their impact is being countered by hidden demand from larger market participants.
Consequently, palladium currently holds a prediction score of +7, reflecting a bullish bias with high confidence on a scale of -10 to +10. This score suggests a constructive structure with consistent buying absorption, despite the persisting high short-term volatility.
Key Levels to Watch
| Level | Role | Comment |
|---|---|---|
| 1,535～1,520 | 1st upper VWAP deviation | Target zone for upward movement if the breakout holds |
| 1,512 | Value area high | Break above 1,512 → Bullish continuation |
| 1,501.5 | VWAP / Around 1,500 | Short-term pivot point |
| 1,489 | Control point | Major dividing line between bulls and bears |
| 1,477 | Low value range | Short-term support structure |
Palladium Price Prediction and Path to Recovery
Following Friday’s sell-off, which decimated many long positions, current metrics suggest that institutional buyers might be reconfiguring their investments around this lower range. The 1,489-1,477 area is now crucial in determining whether palladium finds stability or continues its downward trend.
If the price can hold above the VWAP and break through 1,512, a technical recovery toward 1,535-1,555 becomes more feasible. For now, there’s a bullish bias for palladium; however, traders remain cautious, remembering this is their second attempt after a previous failure to go long last week. This situation carries both high potential rewards and significant risks.
Disclosure:
This analysis serves educational and decision-support purposes and doesn’t constitute financial advice. Trading futures involves considerable risks.
