Palladium bounced off the bottom of an upward trend channel on September 4, signaling the uptrend which began at the start of the year is likely to continue.
The channel is a little more than 40 points wide currently, so trading within it means swing trades are likely to last a couple weeks at most.
Figure 1. Palladium (PA) Futures - December Contract
The bounce of trendline support near 875 indicates a move toward the top of the channel, near 920, which would surpass the current high of 913.
So far the price has shown a tendency to bounce off the channel bottom and not move back below the low of that bounce. Therefore, on the December contract a stop could be placed below 870.05.
Picking up the contract near 890 gives a reward to risk of 1.5:1; okay, but not ideal. Waiting for a slight pullback to 880 or 875 (if it occurs) pushes the ratio above 4:1.
Eventually this channel will break and a deeper pullback will be seen. Until that occurs though, trade with the trend and exploit the channelling tendency while it lasts. If the price begins to disrespect the channel, than another approach will need to be taken.