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, WTI, Ajax, Active Energy, Cab Payment, Delta Gold, DeFi, NARF, Neo, Sovereign Metals, Strip Tinning, and TPX.
In several places, the market is sitting just under key resistance, and the difference between a pause and a proper breakout comes down to whether those levels finally give way.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Major indices
FTSE 100: still leaning higher, but 10,650 remains the trigger
The FTSE 100 continues to trade as though the market is factoring in a calmer outcome on Iran. From a charting point of view, this still looks like a bid move followed by consolidation, and the key level remains 10,650.
An end-of-day close through that area would be enough to open the way to further upside. It is a punchy call, but not an unreasonable one given the way momentum is set up. The RSI is in the upper 50s, which is generally a healthy place to be if the market is preparing for another leg higher.
The issue is simple enough: the FTSE has not yet delivered the breakout.
If there is a pullback instead, the first obvious support is the 50-day moving average at 10,414. Beneath that, the more defensive near-term floor is around 10,330, which also ties in with the lower edge of the rising channel from October. For now, that 10,330 area looks like the worst-case level within a normal market scenario.
DAX: trying to crack the moving average block
The DAX has been wrestling with resistance from the 50-day and 200-day moving averages, but it now looks as though it is trying to push through that congestion.
The market is already above the 50-day line at 23,983. If that hold continues, the next objective is to fill the gap up towards roughly 24,600, which corresponds with the second gap lower seen last month.
Technically, the larger setup has the feel of a bear-trap island reversal, and that is a bullish pattern. It leaves open the possibility that the DAX could work its way back toward previous highs, perhaps by the end of next month if not earlier.
The key point here is that what had been a blocking zone is beginning to look more like a launch point.
Dow Jones: the problem child is improving
The Dow has been the awkward one of the major indices, but the chart is starting to clean up. Price action has moved out of the falling trend channel, and the more threatening lower parallel line, the one that hinted at a doomsday-style extension lower, may now be losing relevance.
The immediate pivot is the 50-day moving average just under 48,000. Above that, the target becomes a retest of late-February resistance, just shy of 50,000.
That gives the Dow a relatively straightforward path if the current recovery continues.
On the downside, if the market slips back under the 50-day line, the more serious support level is the 200-day moving average at 46,900. For now though, the index looks reasonably comfortable at or above the 50-day average, and that keeps the bullish case in play.
Crypto markets
Bitcoin: breakout from the channel, but still stuck under 75,000
Bitcoin has broken out of its falling trend channel clearly enough, but it has not yet managed to force its way through 75,000. That leaves the market in a stalemate of sorts.
If Bitcoin can get above 75,000, the next resistance reference is 79,000, which had acted as resistance on the way down. But momentum has cooled, and because of that, another test of the 50-day moving average just under 70,000 may be needed before the next meaningful upside attempt.
There are still some encouraging signs:
- A rebound from RSI 50
- An uptrend line in the RSI window
- A clear break out of the prior falling channel
The more negative alternative only comes into view if Bitcoin breaks the February uptrend line near 67,000. That would risk a fresh leg lower, similar to the sell-off seen in late January and early February. At the moment, that scenario still feels some distance away.
Ethereum: lagging Bitcoin, with 2,430 still capping the chart
Ethereum has not kept pace with Bitcoin because it has not yet broken out of its own falling trend channel. Resistance sits around 2,430, and until that gives way the market remains in recovery mode rather than full breakout mode.
On the downside, a retreat towards the 50-day moving average at 2,113 is possible. Because that moving average is rising, any move back into that area would probably be treated as a dip-buying opportunity rather than a disaster.
The line in the sand is lower down. Only a break below the February uptrend line, just shy of 2,000, would suggest another January-to-February style meltdown.
For now, the upside best-case target is the 200-day moving average at 2,884. Ethereum still has work to do, but the setup is not broken.
Commodities
Gold: edging higher, with 4,900 still the ceiling
Gold has been trying to reach the 50-day moving average at 4,898, but it has not quite managed it yet. That moving average is currently acting as resistance, and it lines up closely with the top of the falling trend channel in the 4,900 area.
Below the market, recent support sits around 4,600. That leaves gold in a fairly clear near-term range between support near 4,600 and resistance near 4,900.
The RSI is bouncing above neutral 50, which slightly tips the balance towards another attempt higher rather than an immediate slide lower. So the near-term expectation remains a test of the 50-day line rather than a breakdown.
WTI crude: peace premium fading, range shifts lower
Crude oil has cooled as the geopolitical premium has eased. The earlier upside framing of 95 to 105 has now given way to a more restrained range of roughly 84 to 95, with the 50-day moving average around 84 to 85 acting as the lower anchor.
This is still a volatile market, so that sort of range can be covered surprisingly quickly. But from a charting perspective, dips towards the 50-day line look like the obvious area where buyers may be tempted back in.
At the moment the oil chart is less about chasing strength and more about identifying support in a reset range.
Small-cap and stock chart focus
Ajax: bounce from trend support keeps 10p dream alive: Ajax continues to produce regular news flow, and the chart is trying to respond. The shares have bounced from the floor of a rising trend channel and, importantly, have also rebounded above a rising 200-day moving average. The next hurdle is an end-of-day close through the 50-day moving average at 7.5p. Above that, the target becomes the top of the trading range at 9.7p, ideally by the end of next month or sooner. Supporting the setup is a neat RSI 50 rebound, which suggests momentum is trying to build again. For the constructive case to stay intact, it would be best if the shares hold above recently broken resistance at around 6.75p.
Active Energy: double bear trap rebound and a gap reversal: Active Energy is showing one of the more interesting recovery patterns among the smaller names. After a prolonged sideways drift, the shares briefly slipped to new lows, only to reverse sharply. That creates what can fairly be called a double bear trap rebound. There is also an unfilled gap to the upside, giving the chart the look of a bear-trap gap reversal. Targets now look like this: 0.12 at the top of the broadening triangle base by the end of this month, 0.15 as a best-case gap-fill target by the end of next month
Cab Payments: gaps keep doing the heavy lifting: Cab Payments has been one of those charts where each move higher has looked improbable until the next target arrives. The first objective was around 70p. Then came 92p, which at one stage looked optimistic. Now, after the latest gap higher, the next target is around 107p. That level corresponds to prior resistance on the way down, effectively the top of the earlier gap zone. The idea here is straightforward enough: while the shares stay above 92p, the path towards 107p remains open, potentially by the end of this month.
Delta Gold: one of the best charts around: Delta Gold remains one of the standout setups. The shares are moving within a rising trend channel and have bounced above a rising 50-day moving average, which is exactly the type of bullish reset you want to see in a strong trend. The next target is 84p to 85p by the end of this month, though on current form that may arrive sooner. Previous resistance around 69.5p has already given way, and above that the chart has room to keep extending into May and June. Simple chart, strong trend, not much more needs saying.
DeFi Development: bullish divergence points to a turnaround: DeFi Development is not the sort of name that usually appears among the sharp risers, but the chart has been hinting at a turnaround for a while. There was one final ugly dip, but the bigger picture now looks more constructive. Above the 30p area and the floor of the rising channel, the target becomes the 50-day moving average just under 50p, ideally by the end of next month or even earlier. One of the more useful clues here is the bullish divergence on the chart. As long as the shares remain above previous support at 29p, the near-term focus stays on a move towards 50p.
NARF Industries: a range trade starting near the floor: NARF Industries has been trading in a range, but the attraction here is that the setup was identified near the lower end of that range, around the 0.40p area. The latest requirement is for the shares to remain above the most recent gap at 0.52 and then push on towards 0.70p by the end of next month or sooner. There is also an RSI 50 rebound in place, which supports the recovery idea. This is not a runaway momentum chart, but it is one where the technical backdrop is improving from a favourable starting point.
Neo: early turnaround call continues to deliver: Neo gave an early indication that it was turning around back in the 0.50s region, and the shares have continued to strengthen since then. The technical picture now includes: An uptrend line in the RSI window. Price action pushing through the 0.70p area. With that in place, the next target is around 0.95p by the end of next month, corresponding to the top of the falling trend channel from January. This is the type of chart where momentum and structure are starting to align.
Nativo: still a laggard, but finally stirring: Nativo has lagged badly, especially since February, but it is having another attempt at turning itself around. The chart is not as clean or as strong as some of the others, yet there are a couple of notable positives. First, there has been a gap up from the lows. Second, that follows a narrow bear trap rebound, which can often mark an exhaustion point for sellers. The initial expectation is simply a move into the 4s. In a stronger scenario, the shares could reach the top of the range in the 0.5s by the end of next month. The main requirement is that the recent gap remains intact.
Sovereign Metals: sluggish price, but the indicators are improving: Sovereign Metals has been slower than the company news flow might suggest, but there are signs the chart is beginning to improve. The RSI has moved above 50 for the first time in a month, and the shares have found support above a rising 200-day moving average. That combination often precedes a more sustained recovery, but there is still one key step missing. The market needs an end-of-day close through 40p and above the 50-day moving average. If that happens, the shares could then target 50p, perhaps by the end of next month. For now, this one remains a watch-for-confirmation chart rather than a full breakout chart.
Strip Tinning: rising channel in an illiquid name: Strip Tinning is a more obscure and less liquid situation, so the usual caveats apply. Still, the chart itself is constructive enough. The shares are trading along the base of a rising trend channel, and the top of that channel comes in around 35p. While the price remains above the 200-day moving average at 23p, the chart points towards that 35p area over the next month or so. Because liquidity is thin, inactivity would not be a surprise. But technically, the setup is positive.
TPX: steep trend channel, strong close above the 50-day line: TPX finishes the list with one of the cleaner growth-style charts in the group. The shares are in a steep rising trend channel dating back to late October, and the latest close above a steeply rising 50-day moving average at 33p strengthens the bullish case further. Above the 50-day line, the target becomes 50p by the end of next month. Ideally, the shares continue to hold above 30p, which has recently acted as support. When a stock is trending this cleanly, the message is usually not to overcomplicate it. Respect support, follow the channel, and let the chart do the work.
What stands out across the board
There are a few recurring themes running through these charts.
- RSI 50 rebounds are showing up repeatedly, suggesting momentum is improving across a range of markets.
- Tests and reclaiming of major moving averages, especially the 50-day and 200-day lines, are acting as key inflection points.
- Bear traps and gap reversals are appearing in several names, particularly among smaller stocks, and those can be powerful reversal signals when confirmed.
- Breakout confirmation is still needed in many cases. Several charts are bullish in shape, but still waiting for that final close through resistance.
So the market is not in a state of all-clear exuberance, but it is also not behaving as though it expects a major fresh collapse. The technical backdrop is, on balance, improving. The next phase depends on whether these resistance levels start to fall one by one.
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.
