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, Buccaneer, Cellbx, Chesterfield, Coil, CT Automotive, First Class, Georgina, Gana, Hardide, Invinity, Newmark, ShoeZone, TheWorks.
There is a fair bit to like on the index side at the moment, even if crypto is still dragging its feet and gold has gone off the boil. The broad picture this weekend is that equities continue to look constructive, crude oil is threatening a move lower, and a number of small caps are setting up for potentially interesting follow-through moves.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Some of these setups are cleaner than others, and a few are still at the stage where they need confirmation rather than enthusiasm. But from the FTSE 100 and DAX through to names like Shoe Zone and The Works, there are enough charts improving to make this a market worth paying attention to.
FTSE 100: buy signal holding, 10,500 the key battleground
The feeling that a buy signal was in place on Thursday looks to have been the right call. Admittedly, weekend developments around Iran have helped sentiment along, so there may have been a little luck involved there. Even so, the chart itself has improved.
The main point for the FTSE 100 is that it is now above the 50-day moving average at 10,334. That keeps the market on a constructive footing and leaves the door open for a break through the 10,500 resistance zone.
If that gives way properly, the upside target is 10,800 plus by the end of next month.
On the downside, if the market does wobble, the expectation is that any breakdown should be limited to the channel floor around 10,220. For now, that looks like the line in the sand.
DAX: golden cross setup adds to the bullish case
The DAX spent much of the period from February through April in choppy mode, but the rising trend channel now looks more clearly established. That matters because it suggests the market has moved out of the messy consolidation phase and back into a more directional structure.
There are several positives here:
- The 50-day moving average is rising
- The 200-day moving average is rising
- The market is approaching a golden cross, which is often one of the stronger parts of the cycle
The immediate hurdle is 25,000. Clear that, and the next target becomes 26,000 by the end of next month.
Ideally, the DAX stays above the 200-day line at 24,100 in the meantime. As long as that holds, the chart remains in decent shape.
Dow Jones: getting comfortable above 50,000
The Dow is beginning to look as though 50,000 is no longer a novelty level but something the market may actually be getting used to. That is a strong psychological shift in itself.
There is a resistance line projection here that points as high as 52,900. While the index remains above recent support at around 49,200, that remains the favoured direction.
If there is a sudden rug pull, the hope is that any retreat is contained by the 50-day moving average near 48,200, which is rising in parallel with the 200-day line. In other words, there is still a cushion under the market.
Bitcoin: still frustrating, but not broken
Crypto remains the slightly disappointing part of the roundup, and Bitcoin is the clearest example of that. The market has only really managed a marginal touch of the 200-day moving average around 80,500, which has become sticky resistance.
That said, the 50-day moving average is still rising, and that should continue to act as a momentum builder. The hope is that it can provide the springboard for another attempt at the 200-day line.
The key levels to keep in mind are:
- 80,500 as the main upside test
- 72,000 to 77,000 as the zone around the 50-day line
- 69,700 as the floor of the February channel and worst-case support
For the moment, the expectation is that any weakness should be limited to roughly the 72,000 to 73,000 area. But while RSI remains below 50, there is still room for another wobble before the chart properly improves.
Ethereum: sitting on the channel floor
Ethereum is in a more delicate position than Bitcoin. It is already testing the floor of the February rising trend channel at around 2,090, which means there is less room for error.
If this level gives way, there is a real risk of a deeper move into the 1,900 to 2,000 zone.
There is at least one encouraging sign: RSI has recovered somewhat from oversold or near-oversold territory. That helps. But the chart still needs to prove itself on the upside.
The immediate hurdle is 2,160 resistance. Unless Ethereum can get through that level, it remains vulnerable. Best case in the near term is a move up to the 50-day moving average at 2,264.
Gold: momentum fading below neutral
Gold continues to disappoint. If geopolitical tensions around Iran start to ease, it becomes even harder to see what reignites the bullish case in the immediate future.
The chart has weakened while price sits below the October uptrend line at 4,560. That leaves the market exposed to a test of the 200-day moving average at 4,372.
On the upside, the most that can be said for now is that the 50-day line at 4,668 is the first recovery target. But with RSI slipping below 50, momentum is not pointing the right way.
WTI crude oil: lower towards support unless $104 breaks
Crude oil futures are suggesting a move towards $90, and that fits the chart. Once the price slipped below the 50-day moving average at $98, the risk shifted towards a retreat into the $88 to $90 support zone.
The warning sign came from the repeated failure at the April resistance line, now around $104. That persistent inability to break higher was the first real clue that the market was tiring.
For now, the path of least resistance looks lower. If there is a bullish reversal, then $104 is the level that needs to be reclaimed.
Small caps and stock charts to watch
The more interesting action this week may actually be in selected smaller names, where several charts are trying to turn the corner. Some are early-stage recoveries, some are already in motion, and a few need only one more clean break to become much more compelling.
Buccaneer Energy: recovery setup, but fundraising risk remains: The chart now needs an end-of-day close, or ideally a weekly close, above 0.13. If that happens, the shares could head towards 0.19, which would target the bottom of the gap-down from November. The caution here is straightforward enough: in situations like this, there is always the risk the company takes advantage of strength to raise money and blunt the rally. Major support sits near the 50-day line at 0.09.
Cellbxhealth : finally getting traction: Cellxbx is one of those shares that has been looked at repeatedly, but there is a reason for returning to it. The latest recovery has been more convincing, and the price is now above the old gap level at 1.63p. That opens the way to a 2p target over the next couple of weeks. If the move falters, the hope is that support comes in no lower than the initial May resistance at 1.36p.
Chesterfield: golden cross potential and a route to 2p: Chesterfield is making all the right noises technically. Both the 50-day and 200-day moving averages are rising, and the chart suggests a golden cross is on the way. That points to a potentially stronger move higher, with 2p by the end of next month as the best-case target. The bullish view remains intact while the shares stay above the channel floor and 50-day moving average around 0.91p.
Coiled Therapeutics: wedge break improves the outlook: Coil has delivered a decent technical break. The move through the 50-day line at 8.83p and the break out of the falling wedge around 7.75p have both helped the chart significantly. The initial target is the 200-day moving average at 13.88p. Beyond that, best case by the end of next month is 17p to 18p, targeting the top of the broadening triangle in place since December.
CT Automotive: needs a clean break above 34p CT Automotive is trying to break through the top of a falling trend channel. The level to watch is 34p. If the shares can establish themselves above that on a consistent basis, then a move towards 55p by the end of July comes into view. That would line up with the top of a broadening triangle dating back to this time last year. Ideally, the price holds above the 200-day moving average at 29p while this setup develops.
First Class Metals: bounce from support already delivering: First Class Metals has already done rather well off the bounce from the 50-day moving average at 1.7p. The initial 3.1p target has been met. The next best-case target is 3.75p by the end of next month, especially if the shares continue to hold above 2.5p, which was recent resistance and should now act as support.
Georgina Energy: sharp spike, golden cross building, 10p back in sight: Georgina has spiked strongly in recent sessions, and the technical backdrop is improving quickly. The key feature here is the possibility of a golden cross, provided the shares remain above the area around the 50-day and 200-day moving averages at roughly 4.75p. If that holds, the chart points towards a long-awaited move to 10p by the end of next month.
Gana Media Group: finally above the 50-day moving average: Ghana, or Gana depending on how one prefers to pronounce it, has finally broken above the 50-day moving average at 0.22p. That was not necessarily expected to happen quite so soon, which makes the move all the more notable. Above that level, the top of the falling trend channel at around 0.36p becomes a possible target by the end of next month. A more conservative view would be to look towards the upper 0.20s, where February and March resistance comes in. Either way, the main thing is to stay above the 50-day line.
Hardide: steady progress inside a rising channel: Hardide continues to make good progress within a rising trend channel that has been in place since December. The target here is 57p by the end of next month, or possibly sooner, as long as the shares remain above the May resistance level at 43p.
Invinity: target hit, now looking for the next leg higher: Invinity has already reached the previous target at 31p, which was a bit of a surprise in terms of speed, though strong news clearly helped. The next level to aim for is 43p, with the setup staying positive while the shares hold above the old July resistance zone at 28p.
Newmark Security: quiet chart, strong long-term channel: Newmark Security may not be one that gets much day-to-day attention, but technically it looks to be on the front foot. The chart is working within a four-year rising trend channel, and the top of that channel points towards 148p by the end of July. That target remains viable while the shares stay above the 200-day moving average at 100p.
Shoe Zone: insider buying helping the recovery: There has been a lot of share buying in Shoe Zone, and that appears to have done the trick in getting the shares back above April resistance around 51p. The next obvious target is the 200-day moving average at 62p. Best case by the end of next month would be a move back towards the December peaks above 70p, although that is the more optimistic scenario.
The Works: momentum still strong after hitting target: The Works is also looking robust. The shares have already gapped up to meet the earlier target at 57p, and they are now trading above the latest gap level at 54p. That keeps the chart pointing towards a fresh objective of 75p.
What stands out most from this week’s charts
If there is a common thread running through the better-looking charts, it is this: rising moving averages, recovering RSI, and breakouts from falling channels or wedges are doing a lot of the heavy lifting.
The strongest major index setup still looks to be the DAX, particularly with the golden cross theme coming into play. The FTSE 100 also has room to grind higher if it can decisively clear 10,500, while the Dow remains constructive above 49,200.
By contrast, Bitcoin and Ethereum still need to prove they can regain key resistance levels, and gold looks vulnerable while momentum remains below neutral.
Among the small caps, the more interesting technical stories are in names where recovery patterns are either already breaking out or close to doing so. Coil, Georgina, Shoe Zone, Invinity, Chesterfield, and The Works all stand out for different reasons, whether that is a gap move, a golden cross setup, or a clean breakout structure.
As always, the important thing is not to get carried away by one good candle or one promising session. The better setups are the ones that hold above former resistance, confirm with closes above key levels, and keep the moving averages pointing in the right direction. At the moment, there are enough of those around to suggest the market still has some decent opportunities on the long side.
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.
