• Palladium marks new lower low

• Long-term support line attracts interest

Palladium futures could not build on December’s rebound, flipping backwards after confirming a double top pattern around the 1,250 number. The decline re-activated the long-term downtrend from the 2022 top, squeezing the price to a more than a five-year low of 853.49 on Monday.

While the market is within oversold territory according to the RSI and the stochastic oscillator, increasing the odds for a relief bounce, the bears may not abandon the fight yet until they touch the 2018 bottom of 812 and perhaps the 800 psychological level near the crucial support line from June 2022. Should downside forces dominate there, all the attention will turn to the 2017 base of 735.

If buyers put a strong footing near 850, the price may enter a recovery phase to test the 20-day exponential moving average (EMA) at 938. Beyond that, it may re-challenge the 995 resistance territory and perhaps attempt to reclaim the 1,000 psychological number. If those efforts prove successful, the bullish action could pick up steam towards the 1,095-1,135 constraining zone.

All in all, palladium futures look oversold, but unless the 850 region blocks the way down, selling pressures may continue till the 800 round level.