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 Crude Oil, Bradda, Cloudbreak, Fusion, Gem Resources, Mkango, Pantheon, Premier African, Scancell, Tap, and Upland.
The latest chart setup across the major indices, crypto, commodities and a basket of smaller-cap shares is shaping up to be a fairly clear split between markets that are wobbling at support and a few that still look ready to push on. In several cases, the technical message is straightforward: key moving averages and trend channels are now doing the heavy lifting, and where those fail, the downside opens up quickly.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100: sitting on the floor, but not looking comfortable
The FTSE 100 is right on the floor of a rising trend channel that has been in place since October. The nominal line in the sand is around 10,190.
If the index closes below that on an end-of-day basis, the first area to look at is March support around 10,082. But the bigger technical risk is a move all the way down to the 200-day moving average at 9,877.
At the moment, that lower target looks more plausible than many would like. The main reason is the repeated failure of RSI at the neutral 50 zone, with three separate RSI 50 failures in recent weeks. Add in a sharply falling 50-day moving average and a resistance line around 10,150 to 10,350, and the tone remains heavy.
That resistance band has already been rejected twice during the week. So for now, only a move back above 10,350, which marks April resistance, would begin to delay the downside scenario and reduce the risk of a 200-day moving average test.
DAX: break of the March uptrend raises the stakes
The DAX has already done some damage by breaking its uptrend line from March, as well as slipping below the 200-day moving average at 24,117.
From here, the first support level to monitor is the 50-day moving average at 23,731. If the selling deepens, the worst-case near-term support is the floor of the April gap around 23,400.
The RSI is not helping the bullish case either. It is below neutral at 47, which leaves the market on the wrong side of momentum.
To stabilise, the DAX really needs to reclaim the 200-day line on a daily close. Without that, a recovery back towards April resistance at 24,800 looks difficult.
Dow: still constructive, but range-bound for now
The Dow has lost the uptrend line from late March, but that is not quite the same problem as some of the weakness seen elsewhere. The broader structure is still relatively healthy.
The market briefly poked above 50,000, but that breakout did not last. For now, the expectation is a return to a trading range between 48,800 and 50,000 over the coming days.
What keeps the Dow looking better than some peers is:
- The 50-day and 200-day moving averages are both rising
- RSI remains above neutral at around 55
- The market is still holding above key medium-term support
That said, there is a note of caution here. The Dow does not look entirely aligned with the oil price backdrop, particularly if crude breaks higher through 105.80. If oil accelerates, the index may find it harder to keep that constructive tone.
Bitcoin and Ethereum: post-February rally looks spent
Bitcoin
Bitcoin now looks much more likely to have completed its rally phase from February. The key tell was the failure to get above the 200-day moving average.
Even if Bitcoin does manage to push back above that level, the chart still suggests a likely retest of the 50-day moving average at 75,400, with the possibility of a deeper drop after that.
The lower boundary of the channel from February sits closer to 70,000, but for now the first downside area to watch is the 50-day line near 75,000.
The momentum picture has weakened too:
- The RSI uptrend line from February has been broken
- RSI has slipped below neutral 50 to around 48
That does not rule out a bounce, but it does make it harder to argue that the bullish phase is still in full flow.
Ethereum
Ethereum has looked weaker than Bitcoin for some time, and the chart reflects that. It is already below its 50-day moving average at 2,258.
That puts the focus on the lower edge of the channel at around 2,100. While price stays beneath the 50-day line, that is the most obvious target.
Only a move back above 2,258 would improve the picture enough to give Ethereum another chance of retesting 2,400 resistance.
Gold: a disappointing break, but a possible longer-term opportunity
Gold has also disappointed on the chart. The market has now broken the uptrend line that had been in place since October.
With that trend support gone, the risk is for a move down towards the 200-day moving average at 4,343. That test could arrive by the end of next month, or possibly sooner.
The level that would begin to stabilise things is the 50-day moving average at 4,730. Only an end-of-day close above that would really start to delay the downside scenario.
Even so, a drop towards the 200-day moving average would not necessarily be a disaster for the bigger picture. In fact, it could offer a more attractive entry point for gold bulls, especially given how long the market has stayed above that line. Gold has not been below its 200-day moving average since the end of 2023, which underlines just how strong the broader run has been.
WTI crude oil: one of the strongest setups on the board
Crude oil is one of the cleaner bullish charts at the moment. It looks primed to break the resistance line from last month at around $105.80.
If that gives way, the next upside zone is the best level of the year so far, around 117 to 118. That move could come fairly quickly, potentially over the next week or two if momentum holds.
The bigger-picture best case is even more ambitious. The top of the rising trend channel from January points to as much as 140 dollars by the end of next month.
On the downside, support levels are layered as follows:
- 95 dollars at the floor of the rising channel
- The 50-day moving average at 97 dollars
- Recent price support just under 90 dollars
As long as crude remains within the channel and above the 50-day line, the bias remains higher.
Small-cap stock charts: where the action is building
The stock section is dominated by recovery and breakout setups. A number of these names are early-stage, punchy and volatile, so the chart levels matter a great deal.
Bradda Head Lithium: Bradda has been one of the better-looking setups since the push higher that began in the final days of April. The initial target was 2.1p, followed by a second target of 3.1p. If the shares can get cleanly through 3.1p, the next objective becomes a July 2023 resistance line, opening up the possibility of 5p by the end of next month.
Cloudbreak Discovery: Cloudbreak has bounced for a second time off a sharply rising 200-day moving average, and the 50-day line is already rising as well. That is the sort of combination that can underpin a more durable recovery. The initial target around 0.99p, marked by the top of the channel from October, has already been hit. Beyond that, the next upside level is 1.3p, effectively post-September resistance, which could be reached by the end of next month or sooner. The key condition is simple enough: ideally the shares remain above 0.7p and above the 200-day line.
Fusion Antibodies: Fusion Antibodies has been building nicely, and the broader biotech space appears to be enjoying something of a purple patch. The chart target is 18p to 19p, representing post-September resistance, and the setup remains valid while the shares stay above the 50-day moving average at 13p. An RSI rebound through the 50 area helped get things moving during the week, which adds to the positive technical tone.
Gem Resources: Gem Resources also looks as though it is coming back to life. Price action has been moving either side of a rising 200-day moving average, while the 50-day moving average is already trending higher. The next notable feature is a likely golden cross, and that strengthens the case for a move towards 0.82p by the end of next month, provided the shares hold above the 50-day line at 0.28p. The extended period of RSI above 50, together with positive price action over the last month, makes this one technically interesting.
Mkango Resources: Mkango looks lively and, as noted, appears to have support from places with money. The chart itself is certainly punchy. The shares are now breaking through the rising 200-day moving average around 47p. The initial target is 55p, which matches the top of a falling trend channel from October. If that barrier goes, the next target is 72p, potentially as soon as the end of next month. That is an aggressive call, but the chart is behaving like a stock that may be ready to deliver something sharp.
Pantheon Resources: Pantheon had a notably strong day on Friday, with the shares pushing through 12.6p and then retesting the top of the channel around 15.6p for the second time in a couple of months. A break above 15.6p would point towards 20p by the end of next month, or even sooner. That level corresponds to post-December resistance. The current market backdrop may also be helping, particularly if oil prices continue to strengthen.
Premier African: With Premier African, the cleaner approach is simply to ignore fundraising concerns, past or future, and focus on the chart. The shares have produced an RSI 50 rebound and bounced above a rising 50-day moving average at 0.18p. While that remains intact, the target is the top of the falling trend channel around 0.32p by the end of next month.
Scancell Holdings: Scancell benefited from major FDA-related news at the end of last month, and the chart has responded well. The upside target is now 27p, which lines up with three-to-four-year resistance. The setup remains constructive while the shares stay above 20p. That does not look like too much to ask given that both the 50-day and 200-day moving averages are rising, and the news flow has clearly improved sentiment.
Tap Global: Tap Global finally showed signs of life at the end of the week, breaking through the 50-day moving average at 1.3p. Above that, the first objective is the top of the recent range and the upper edge of the triangle from January, which points to 2p by the end of this month. The best-case scenario stretches to 3p by the end of next month. There may be selling around that area, especially if an overhang from a voluntary lock-in continues to cap rallies, but if this latest move has legs then 3p is not out of the question. The fact that the 200-day moving average is rising gives the chart at least some extra credibility, even if Tap has had a habit of disappointing before.
Upland Resources: Upland has the look of a bear-trap gap reversal, and the chart is holding above both the floor of the channel and March support at 2.6p. The next hurdle is the resistance line from December at 3.15p. If that breaks, the best-case target rises to around 4.8p by the end of next month. That is another punchy target, but after a period of frustration the shares may finally be due some sort of rally.
What matters most into the next stretch
Across the major markets, the broad message is that several assets are at or near important inflection points.
- FTSE 100, DAX, crypto and gold all look vulnerable unless they can quickly reclaim nearby resistance or moving-average levels.
- The Dow remains relatively stable, but still appears capped in a range for now.
- WTI crude oil is the standout bullish setup, with a break above 105.80 potentially opening the way to much higher levels.
- Selected small caps are showing classic recovery and breakout patterns, with a number of names setting up for potentially strong moves into next month.
As ever, the key is not to get carried away with the story when the chart is doing the talking. If support holds, great. If it breaks, the next level tends to come into focus very quickly. Right now, oil looks strongest, gold and crypto look vulnerable, and the small-cap list contains a few genuinely interesting setups for those prepared to follow the levels closely.
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.
