Watch the Daily Divergences in Platinum Prices

Nov 12, 2009: 3:57 PM CST

Platinum Prices?  What does that have to do with stocks?  For one, the recent price pattern in Platinum resembles the recent ‘run-ups’ in stock prices.

Let’s take a quick look at the daily chart of platinum futures (index) to note the negative divergences setting in under the recent 2009 price highs and levels to watch to confirm a turn… or trend continuation and over-ruling of these pesky divergences.

This is just a quick look to note the recent swing highs and the divergence in the 3/10 Oscillator – similar to what we’re seeing in the S&P 500… only platinum prices failed to rally to a new 2009 high on the current swing up.

The $1,380 level appears to be key resistance to watch for Platinum prices.  A solid close above this level would set-up a test of the $1,400 level, and any move above $1,400 would argue against these divergence and in favor of trend continuation (meaning watch the moving averages more than momentum).

Until that happens, we might should watch closely at the hints of non-confirmation coming from the lower peaks in the momentum oscillator that are not confirming the higher swing highs in price.

Thus, watch the 20 and 50 day moving averages and especially the confluence support with the lower Bollinger Band at $1,320 for potential support.

Any move under $1,300 would argue for a short-term trend reversal and that these divergences did ‘catch up’ with price, dragging it lower.

Either move should correspond with a similar move in stock prices so watch these closely for clues to the future.

Corey Rosenbloom, CMT
Afraid to Trade.com

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2 Comments

2 Responses to “Watch the Daily Divergences in Platinum Prices”

  1. SINGERSMARKET Says:

    Corey,

    this longer term weekly plat chart identifies 1359 as key support/resistance going back… we keep poking above it but failing…

    http://4.bp.blogspot.com/_r47sOI__h_M/Ss6oCD8HJ

  2. SINGERSMARKET Says:

    Corey,

    this longer term weekly plat chart identifies 1359 as key support/resistance going back… we keep poking above it but failing…

    http://4.bp.blogspot.com/_r47sOI__h_M/Ss6oCD8HJ