Platinum futures followed gold higher in Wednesday's session as the retracement rally in precious metals continued to show signs of strength. Platinum remains at a historically steep discount to the price of gold, but managed to narrow the gap during the latest correction. Autochartist has identified major trend line support on the 240-minute platinum chart which warrants close monitoring for determining near term direction.
This support comes in the form of the underside of a Flag chart pattern which has been developing since the market found a bottom last week. After recovering from a retest at $1,420 per ounce, the price is now well positioned for a test of resistance near $1,460 per ounce. This would set a friendly tone for the chart and increase the chances that the swing low near the $1,380 level is a cyclical bottom to rally from.
Alternatively, a move back below the trend line support would indicate that this Flag is actually a continuation pattern for a resumed slide to new lows. If this occurs it will trigger a breakout signal on the Autochartist platform and project a forecast that is likely to hold a range below $1,380 per ounce, which would be an exceedingly bearish development.
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