While platinum fell heavily during last month’s “flash crash” it bounced off medium term trend line support, unlike gold which smashed below its support.
Holding this long term support, could favour a bullish set up if platinum breaks out of the current range on the 4 hour chart.
The chart below shows platinum bouncing off long term trend line support.
As this happened, the slow stochastic indicator in the box under the chart began to trend upward out of the oversold zone. This situation on the longer term chart often favours short term set ups based on lower time frame charts.
4 Hour Chart
The “dual time frame” approach is a common technique for technical traders. This involves trading in the direction of the trend or momentum on longer term charts but using shorter term charts to identify set ups and get closer to the action.
The trading range on the 4 hour chart looks interesting as a possible bullish breakout situation under a dual time frame approach.
A break through the resistance line here could confirm a bullish move through the 200 period moving average (green line). A typical entry strategy would be to use a stop entry order to buy if price gets clear of the trend line resistance by a small distance.
If there is a set up I’ll post a follow up on ideas for stop loss placement and profit objectives.