Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.03% and -1.08% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.53% and -0.51% . Friday´s return was 4.78% , more than the third standard deviation. It was a very positive day for the bulls. Our scoring is currently positive (1 ) for the month-on-month change and 1 for price indexation. Both scorings range from -3 up to 3 . Indexation is currently in a growing phase of the cycle. The development of the estimated cycles based on our analytical system is shown in the following chart.
Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. In the case of longer-term MAs, XPT/USD is in bearish sentiment. However, the monthly MA again supports bulls.
Since our last analysis, we have witnessed higher downward trends, even though the price is higher. They did not exceed 4 days. The total maximum in the measured period (last 3 years) is 7 days. Upward trends did not exceed more than one day in the same period. The total maximum for the last 3 years is 6 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.27% ) to estimate Stop Loss orders for our positions. The current value is 4.29% , well above average. Approximately 90% confidence interval (return between -2.40% and 2.40% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (3.60% ) to estimate Profit Targets, as shown in the chart below.
Since the beginning of this year, the basic technical analysis has supported bearish sentiment as the price of the commodity creates lower lows and lower highs. However, a recent rebound from an important area may have finally motivated the bulls. Yesterday, XPT/USD bounced off the demand zone (green rectangle), where are the Fibonacci retracement level of 50.00% and the psychological level of 1 000.00 . In addition, it climbed above the short-term moving average. The bullish scenario also supported the divergence between price development and the RSI created since June. However, we can see the creation of the opposite divergence, which could be helped by the resistance created by the Fibonacci retracement level of 38.20% .