As you may have understood from the latest trading updates I have sent out by email, I am getting once again VERY bullish on PAL (North American Palladium). The last time that that happened, was in 2008-2009, at prices between $0.90 and $1.30, when I had a price target of $6-8.

Right now, I am in some sort of “hair-scratching mode”, as it puzzles me that PAL is so insanely cheap right now.
I hope I am not missing anything, but as far as I can judge myself, I have done enough research to conclude that PAL is cheap.

Over the last 2 years, PAL has raised quite a lot of capital for mine expansion. Most of the investments are done now (about 85-90% of $100+ million), so now it’s just waiting for the market to realize that.
The Gold divisions are for sale, and once sold, they will boost PAL’s cash balance quite significantly.

The fact that Palladium is now trading around $610 per ounce, while PAL is only at $1.46 right now is puzzling me.
Back in 2009, PAL was also trading at 1.30-1.50$ per ounce, but back then, Palladium was trading at only 200-250$ per ounce…

So it got me thinking… and charting…

Below you can see several charts.
The first one is the canadian listes stock for PAL (PDL.TO). We can see that price is approaching the crucial 17year old support at $1CAD.
The second chart shows how many shares of PDL.TO you can buy for the price of one ounce of Palladium. Never before did you get so many shares as today for 1 ounce of Palladium.
The third chart shows the price of PAL divided by the general commodities index (known as the CRB Index). PDL.TO is trading at an historical low price compared to a basket of commodities.
Last but not least, PAL is trading close to an historical low price compared to the S&P500 index.

All of this of course doesn’t GUARANTEE that PAL will rise in price, BUT… if history is any guide, now might be the EXCELLENT opportunity to load up on PAL, which is exactly what I am doing.

Oh, and PS… Johnson Matthey just came out with a new report today, which is an interesting read, saying Palladium will be in a supply deficit in 2013: http://www.kitco.com/reports/KitcoNews20121112AS_breaking_palladium.html