Platinum futures exploded higher alongside a very bullish trend reversal in the precious metals complex. The massive rally in the stock market sent short sellers scrambling for cover as the prospects for a recovery in the financial markets brightened, giving the metals a high-momentum lift. This move in platinum established a clear technical breakout on the Autochartist platform's 240-minute chart analysis.
The breakout above $1,550 per ounce triggered a buy signal by penetrating the upper trend line of a massive Falling Wedge chart pattern. The resistance offered by this pattern has been capping all recent rally attempts prior to Wednesday's turn-around. The surge began after a successful retest of the key level support at the bottom of the wedge near $1,510 per ounce.
The momentum of the move scored a maximum 10-bar reading on Autochartist, and flow-through buying as the week progresses would likely confirm the breakout. The projected price target anticipates a rise to between $1,588 and $1,632 per ounce to complete the pattern. Should speculative buying increase as the forecast is approached, the bottom of this Falling Wedge chart pattern just above $1,500 may prove to be the long term cyclical low for the platinum market.
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