Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, Audioboom, Critical Mineral, Catenai, Getech, Genedrive, Georgina, Jersey, Light Science, Mila, Mkango, Orcadian, and Pulsar.
Below I run through the major indices, a quick look at crypto and gold, then the mid and small cap names I have my eye on right now. I call out the technical levels that matter and where I think upside or downside risk lies over the coming weeks.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major indices
FTSE 100
The prime minister can take credit for every single point the market has rallied since he became prime minister
FTSE 100 is at record highs and finding support near the top of the rising trend channel that began in June, roughly around the 9,700 level. Above that, the May resistance line projection sits near 9,830 and is the next obvious upside target.
On the downside, look to the early October peak at 9,577 as the first sign of trouble if the index breaks lower. So long as we remain above the rising channel floor, the bullish bias stays intact.
DAX
DAX remains stuck in a fairly narrow sideways range between recent resistance close to 24,400 and the 50 day moving average around 24,000. Volatility is low and the 50 day is starting to slope down while RSI sits below neutral 50, which gives a slightly negative tone.
However, while we stay above the April channel floor at about 23,800, the medium term target is the top of that rising channel, near 26,000.
Dow
The Dow has been pushing toward the top of its channel around 48,300 and is looking to reach that level, probably by the end of next month. The flow of interest rate news will determine how quickly that happens; recent rate commentary has taken a little of the edge off the rally. Keep 47,000 as a key short-term support level.
Cryptocurrencies
Bitcoin
Bitcoin looks less constructive than the major indices. We have what reads like a double top against the early October resistance around 116. On the plus side, price remains above the rising 50 and 200 day area at roughly 109 and above the floor of the year-to-date channel around 105.
Best case I am watching for a push toward the channel top near 130 by the end of next month. Realistically, however, that scenario only gains credibility if 116 is cleared convincingly. Failure to break 116 increases the odds of a move back to 105 first.
Ethereum
Ethereum is testing its uptrend from April around the 3,800 area. While above that level on an end of day close, the next target is the 50 day at about 4,212. The chart has been unable to get near the RSI resistance line on recent rallies, which is a negative sign.
If momentum fails, expect at least a test of the falling trend channel floor from August near 3,520, with the risk of a deeper slide to the August support and the 200 day just above 3,300.
Gold
Gold looks tired after the recent rally. We saw a low down to roughly 3,886 and then a bear trap rebound from below the earlier October resistance at 3,930. The market is back above the top of the rising trend channel from April, around 3,960, which is constructive. From here I am looking for a retest of resistance on the way up near 4,160 by the end of next month, assuming we hold above the channel top. RSI is just on the wrong side of neutral 50 but the bear trap rebound gives at least a short term positive skew.
Stocks to watch
Below are the names I am watching closely with the technical levels I think matter in the near term. Targets are generally my near-term or next resistance projections, and supports are the moving averages or channel floors mentioned.
- Audioboom Shares have nudged higher while we wait for a mega deal. RSI has bounced above 50 which is positive. A decisive end of day close above the recent peak around 640p would open a move toward the red resistance projection near 780p by the end of next month. Staying above the 50 day is important here.
- Critical Mineral Resources Riding a theme that is currently in favour, the share price is in a rising channel from July. Recent resistance sits at about 3.6p and, while above that, my best case near term target is the top of the channel toward 6p by the end of next month. The 50 day is rising and acting as support.
- Catenai An update on Ludium gave the shares a lift and we bounced off the rising 50 day. The next technical target is roughly 0.54p, the top of the April channel. RSI is back above neutral 50 but the stock needs more conviction to reach 0.5p plus.
- GETECH Group Contract news has spiked the shares to the top of the recent range. The channel top and best case near term level is around 2.75p while keeping above today’s intraday low just above 2p supports the bullish scenario.
- Genedrive Nice breakout through summer resistance. The shares are now trading in an area between the summer resistance near 0.60p and the 200 day moving average. If they hold above 0.60p the 200 day acts as the next upside magnet over the coming weeks, with earlier resistance around the 1.2p zone also in play.
- Georgina Energy Second wind after good news last week. The shares have just touched the 200 day near 6.6p. If they stay above September resistance around 5.5p, I would expect a run back toward old July resistance near 8.8p by the end of next month.
- Jersey The stock has produced several RSI 50 rebounds and is sitting above the 50 day at about 132p. The channel top near 212p is a longer term target and, if momentum continues, reaching £2 plus by Christmas is a reasonable scenario while the shares remain above the 50 day.
- Light Science Decent corporate news has the market warming to the story. The next technical target is near 7.5p, the October 2022 resistance line. Staying above recent support around 5.5p should keep the bulls in control toward the end of next month.
- Mila The recovery here has been impressive with RSI at or above neutral 50 since the end of August. The second target on the chart is approaching 2.75p, which was prior support on the way down in 2022. Continued strength above the 50 day would keep that on the cards.
- Mkango After an odd RNS episode earlier in the month, shares have bounced off the floor of the rising channel from July and reclaimed the 50 day at about 46p. Ideally the stock stays above the channel floor around 49p so it can retest 70p plus by the end of next month.
- Orcadian Surprisingly strong given the macro headwinds for energy. The first target of 16p was hit. With both the 50 and 200 day moving averages rising and approaching a golden cross, there is scope for a punchier upside to the upper parallel of the rising channel near 33p into year end.
- Pulsar Pulsar has been volatile but today’s Jetream news produced a strong gap up. The pattern looks like a two day bear trap island reversal which is a robust bullish signal. Above the gap floor at 42p the shares have a clear path back to recent highs of 60p plus over the next month.
Summary and what to watch next
In the big picture, indices are broadly constructive while cryptos look more mixed and gold needs to sustain its rebound. For the small caps I highlighted the key levels to watch: 50 day and 200 day moving averages, the floors and tops of recent rising channels, and RSI behaviour around neutral 50.
Keep an eye on interest rate headlines that can sap momentum from the broader market, and on whether key technical levels are cleared with conviction. I will be watching the FTSE’s 9,700 to 9,830 area, Bitcoin’s 116 level, and the small cap names above for follow through or failure signals.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
