PAL

[David Randolph]

Another nice white candle for PAL, reacting positively to the 50 days SMA. What we really need now is PAL to close above the short term descending trendline, today at $10.76. Palladium prices have been flat lately. Let me check Nickel prices too. Rebounding some after a sharp sell off in June.

I'll keep holding PAL.

[David Randolph]

Palladium prices have remained more or less the same over the last 20 days or so:



... and PAL is still deciding if it wants to push higher and breakout above the $10.69 short term descending trendline or breakdown below the 50 days SMA support, currently at $10.23.

Longer term I believe the following trend will continue and palladium and PAL will go higher:

«The palladium price continues to display consistent strength and momentum as rising confidence in supply/demand fundamentals is fueled by growing global emission legislation and historically significant divergences among platinum group metal prices.»

The biggest use of palladium is for auto catalysts:



And that's expected to grow:

«By far the largest use of palladium today is for automobile catalytic converters. Based upon some estimates the 450 million automobiles in the world today is projected to more than double in the next 30 years requiring a growing use of palladium. And, while some forecasters suggest palladium recycled from scraped automobiles will become a large factor in the supply/demand price equation for palladium in coming years, other factors will mitigate these projections.

First, as mentioned, the growth in the number of cars in the world is expected to continue unabated with an increasing number of cars each year, each required to meet increasing environmental standards. Second, many of the cars reaching the end of their useful life in developed countries of the world are increasingly finding their way to less developed countries as used cars. Some used cars simply gravitate there; others are even being refurbished and then freighted.

This will delay and may eliminate the recovery of metals in many of these cars. Working against some of these gains will be increasing fuel economy and improved engine and catalytic technology, both of which will reduce the level of PGM consumption in cars.

Diesel engines operate at lower temperatures than gasoline engines and, to date, platinum is better suited as a catalyst in converting CO, NOx and hydrocarbons to harmless emissions at the lower temperatures. However, when it comes to reducing or eliminating DPM, which is essentially carbon, temperatures must be increased in order for the carbon to be oxidized before being exhausted. At the higher temperatures palladium may be important, as it not only reacts well at higher temperatures, but it can tolerate higher temperatures better than platinum. Further, with palladium currently at a steep discount to platinum there is an economic incentive to develop technology using palladium.

In this regard, a large European automobile manufacturer recently mandated a research and development effort to examine and advance palladium-based technology for diesel catalytic converters. The reason is apparent. In Europe, 44 percent of the cars built in 2003 were equipped with diesel engines and recent CAFÉ (fuel economy) standards announced by China, will ultimately result in a similar percentage of cars built by China's surging car industry to be diesel. Thus, a growing concern over insufficient supplies of platinum to meet this growing diesel demand, placing urgency in finding a way to use palladium for this application.

One remaining obstacle to perfecting this palladium technology is the sulfur content of diesel fuel. Sulfur tends to collect on palladium more than on platinum. And at higher temperatures the sulfur tends to generate sulfates that are then exhausted. Sulfur will be sharply reduced in diesel fuel in the U.S. in 2006 enhancing the opportunity for palladium technology for cleaning diesel emissions. Knowing this, Stillwater Mining Company is currently having a palladium catalytic converter and DPM filter fabricated using palladium to test with low sulfur fuel in our mine operations.»

I'll keep holding PAL.

[David Randolph]

Palladium rose a bit:



But PAL went down 1.15%. I guess it's just short term noise. I'll keep holding PAL.

[David Randolph]

PAL refuses to close below the 50 days SMA support and decision time is coming, since the short term resistance level is now at $10.56. The stock needs to close above that, with strong volume, to open the way for a new high above $12.

Palladium is up to $376 an ounce in Zurich trading this morning, so everything is set for a nice bullish breakout for PAL. I'll hold whatever happens.

[Amarens]

Nice but wrong chart. 

Amarens

[David Randolph]

Nice but wrong chart. 

Amarens

Sorry Amarens, I've corrected it.

[David Randolph]

Palladium closed at a new 30 day high yesterday, at $378 an ounce:



Yet, that wasn't enough to send PAL above its short term resistance trendline. Probably that's because people are focusing on nickel and nickel has been down a lot lately (not unexpectedly - the forward futures contracts had that priced in already):



But PAL is more about palladium than nickel. And I don't think nickel is in a bear market, just having a steep correction as all long term bull markets have.

I'll keep holding PAL.

[yukiii]

Was just taking a look at PAL again. If you look at a 5 year chart of PAL.
Starting with 2004 where rev. was higher then they are now. You will see 3 years where PAL
peaked in April - May each year. Something to think about.
http://finance.yahoo.com/charts#chart2:symbol=pal;range=5y;indicator=volume;charttype=candlestick;crosshair=on;logscale=on;source=undefined

[David Randolph]

Nickel rebounded a bit yesterday and palladium remains stable. No news out for PAL. I'll keep holding the stock.

[yukiii]

Nickel rebounded a bit yesterday and palladium remains stable. No news out for PAL. I'll keep holding the stock.

Broke support $10.21 next support $9.50. Let see where it closes.

On another topic..
Stocks are flirting with all-time highs, and Treasury bond yields are flirting with five-year highs. That means that stocks aren't quite as attractive as they were when prices were lower. And it means that bonds aren't quite as unattractive as they were when yields were lower. It will be a stock-pickers market going forward. Need to find high growth at bargin prices. Take a look at WPCS and LMIA.

[David Randolph]

Broke support $10.21 next support $9.50. Let see where it closes.

Closed at $10.17, no big deal.

It will be a stock-pickers market going forward. Need to find high growth at bargin prices. Take a look at WPCS and LMIA.

I'll do that, thanks for the suggestions.

Palladium is flirting with its 1 year high:



If Palladium breaks out to a new high, as I think it will, PAL will follow suit, because that will mean higher revenues and profits for the company.

I'll keep holding PAL.

[David Randolph]

Arghh, PAL is starting to hurt here. Palladium fell a little more than 1% yesterday, but nickel rose a bit. The stock declined 3.64% to $9.80.

$9.80 is a technically important level as one can see at the medium term chart below. It is also the 50% Fibonacci retracement level.

Given the fundamentals I'll expect PAL to hold this $9.80 zone and start climbing again, so I'll keep holding PAL for some more time.

[babouk]

Maybe PAL is a good company, but the chart talks to us - sell.

[babouk]

I don´t know that to do - fight the trend (bearish) or sell with loss . I expect David to sell PAL tomorrow.

[yukiii]

I don´t know that to do - fight the trend (bearish) or sell with loss . I expect David to sell PAL tomorrow.

Its overvalued, don't know what to tell you, Metals are correcting PAL more then other's because of the crammer effect. I would sell and buy AUY when gold hits bottom or buy SWC its at a bottom already or buy more PAL if it goes to $8.00 its all relevant to amount invested and your time period.