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, African Pioneer, Bunzl, Delta Gold, Empire Metals, First Class, Gear4music, Manx, Neoterra, Premier African, Sulnox, Tinybuild, XP Factory.
The broad picture across markets is mixed. Equity indices are trying to stabilise and, in some cases, look ready to push higher, while crypto remains weak, gold is under pressure, and crude oil is struggling badly. On the stock side, there are still pockets of technical strength, especially where momentum is improving through RSI 50 rebounds, rising moving averages, and the occasional golden cross.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100 tries to regain its footing
The FTSE 100 has been shuffling around either side of the 50 day moving average, which sits near 10,399. What stands out now is a decent hammer candle and a bounce from around RSI 50, or just below it. That usually suggests the market is trying to steady itself rather than roll straight over.
The first upside target is the top of the falling red channel, around 10,540. Even if there is another dip after that, the near term action looks healthier than it did a couple of sessions ago thanks to this rebound.
On the downside, today’s low near 10,332 matters. That had already been flagged as a support area. If that gives way, then the next obvious destination looks closer to 10,240. For now, the working assumption is that the bounce has a bit more room in it.
DAX still consolidating, but momentum remains constructive
The DAX has also been trying to bounce after filling a gap around 24,700. The hope here is that this latest phase of sideways consolidation is the final one before a more convincing move through the May resistance area around 25,000.
If that breakout comes properly, the best case into the end of next month is a move toward 26,300.
There is also a supportive momentum backdrop here:
- The 50 day moving average is rising.
- The 200 day moving average is rising too.
- RSI is around 55, which leaves room for further gains.
If the market is hit by a sharp reversal, the likely fallback area is around 24,500, where the channel floor and 50 day line come together.
Dow looks set up for another push higher
The Dow is showing a familiar hammer style rebound as well, this time after dipping below recent support near 51,300 and then snapping back. That kind of move often has the feel of a bear trap.
The immediate objective is 52,300, which marks the top of the rising channel from April. If the positive setup continues into the end of next month, there is scope for a move toward 53,800, based on a projection from a resistance line dating back to November.
The key support on the downside is the floor of the channel around 50,500. As long as that remains intact, the bias stays upward. RSI near 60 is also stronger than what has been seen recently in the DAX and FTSE, which gives the Dow a relatively solid momentum profile.
Bitcoin remains under pressure
Crypto continues to look sickly. The interesting relationship at the moment is that stronger equity markets are not helping Bitcoin. If anything, the contrast is making crypto look even weaker.
Bitcoin had one last spike through 65,000, which was an old support area from March, but it could not hold above it. That failed attempt now leaves the market vulnerable to another test of 59,000, the support zone from early June.
If that level fails, then the bottom of the falling red trend channel comes into play. That currently points toward the 56,000 area, and potentially lower by month end. In a weaker scenario, 53,000 to 54,000 cannot be ruled out.
Ethereum looks vulnerable after losing support
Ethereum spent a long time moving around the old February support area near 1,753, but that level now appears to have been lost. Yesterday’s high around 1,786 marks the point below the recent spike, and while the market stays under that, the path of least resistance looks lower.
The basic expectation is for a retest of 1,500, or slightly below. A full slide to the channel floor nearer 1,000 is not the preferred call right now, but the current channel structure still suggests downside risk into the 1,350 to 1,400 region.
Gold is still fighting to avoid deeper losses
Gold is in a battle to avoid a retest of the worst recent levels. While the market remains below resistance at 4,230, the main target stays the floor of the current channel, which is near 3,980.
Momentum is not helping the bulls. RSI is down around 35, which leaves room for further weakness before the market even gets properly oversold. A move into the RSI 30 zone would fit with another day or two of decline.
Crude oil is weakening by the day
Crude has become one of the weaker charts in the pack. The big technical problem is the loss of the 200 day moving average around 73.90. Once that went, there was very little chart support until the old February gap floor near 68 dollars.
RSI is already oversold, but that does not stop the market falling further. Oversold can stay oversold in a weak trend. As long as crude remains below the 200 day line, the bias remains down toward 68.
Stock charts to watch
African Pioneer: African Pioneer is on the verge of a golden cross, likely within a day or two, and it is also pressing against the top of a rising trend channel around 1.63p. A clean break there would keep the recovery theme alive. The bigger target into the end of next month is around 2.3p to 2.4p, with the chart supported as long as it stays above recent resistance in the 1.35p area.
Bunzl: Bunzl is not the usual small cap fare, but the chart has become interesting because of the sharp turnaround from RSI 50. The last time the shares bounced from that zone, they produced a decent rally from February into March. There has also been a move back above a rising 50 day moving average, and ideally the 200 day line follows. If that setup completes, the shares could head toward the top of the channel around 2,840p by the end of next month.
Delta Gold: Delta Gold has been a strong chart for much of the rally since breaking above 23p, the initial resistance from January. Since then, it had not looked back much until the latest setback. The trouble now is that the shares have fallen below the 50 day moving average, now around 138p, and that raises the risk of a fourth test of the 100p area. Momentum has weakened too, with RSI slipping below 50. For the bulls, the recovery signal would be an end of day close back into the channel and back above the 50 day line. If that happens, a move back into the low 160s becomes possible. Until then, the breakdown has to be respected.
Empire Metals: Empire Metals appears to have broken out of its recent consolidation. The next hurdle is the old April peak around 41.5p. If that is cleared, the initial target is 44p. A quick move through that level before the end of the month would then open the door to a retest of the year highs, just under 50p. The ideal technical condition here is simple: stay above the 200 day moving average, which sits just under 38p.
First Class Metals: First Class Metals is showing decent resilience, especially considering there was a recent placing around 3.8p. The shares keep trading around that prior target area. If there is a sustained move through 3.8p, then the next target comes in just above 5p, around 5.1p, for next month.
Gear4music: Gear4music had a strong update and the chart has caught fire. A sideways breakout through 258p has changed the picture, with the first target at the 200 day moving average near 279p. The more important trigger is an end of day close above that 200 day line. If that happens, it opens up the prospect of a move to the top of the rising trend channel from October, around 350p, perhaps by the end of July. Only a move back below 258p would really delay the upside scenario.
Manx Financial: Manx has started to show some strength after being off the radar for a while. An end of day close through the rising 50 day moving average near 25p would at least allow a retest of the May resistance at 28p. Because this is a slower mover, the more ambitious target likely sits further out, perhaps by the end of the summer, at 36p. That would match the top of the rising trend channel that has been in place since October. The main condition is that the shares stay within that channel, with the floor around 24p.
Neoterra: This chart is quietly improving. The shares have been edging higher along the floor of a rising trend channel from the turn of the year. Support comes in around 2.66p, and while the stock holds above roughly 2.5p, the expectation is for a retest of the 50 day moving average at 3.1p well before the end of next month. There is also a neat RSI 50 rebound in play, which adds weight to the recovery case despite the painful pullback seen in May.
Premier African: Premier African remains one of those shares that can upset people whenever it finds strength, often because rallies tend to be followed by fundraising. Still, the technical picture has improved enough to warrant attention. There is a rising trend channel in place, with the floor around 0.19p. While the shares hold above that, the target becomes 0.30p by the end of next month. The recovery argument is helped by a 50 day moving average that is starting to rise from the lows.
Sulnox: Sulnox on the Aquis market is shaping up for a golden cross and also has an unfilled gap to the upside. The key breakout level is 65p. More cautious traders will probably want to see that level give way before turning more positive. If the breakout comes, the target by the end of September is around 120p. This one may need more time than some of the others, but technically the main issue is very straightforward: break 65p.
TinyBuild: TinyBuild has a clear bull flag setup above old resistance around 8.5p. As long as the shares stay above that area, the expectation is for a move toward the top of the channel and range, around 13p, by the end of next month. This is one of the cleaner continuation charts in the list.
XP Factory: XP Factory is another chart that continues to grind higher within a rising trend channel, in this case one that has been in place since December. The top of that channel sits around 27p, and that remains the target while the shares stay above recent support at 18p. One of the most encouraging aspects of this chart is the persistence of momentum. RSI has been above the neutral 50 level since the middle of March, which points to a strong and durable underlying trend. Add in rising 50 and 200 day moving averages, and the technical backdrop still looks favourable.
What stands out across the charts
A few themes are showing up repeatedly:
- RSI 50 rebounds are proving useful as early signs of renewed strength.
- Rising 50 day and 200 day moving averages continue to support bullish equity setups.
- Hammer candles and bear trap reversals are helping indices recover from recent weakness.
- Crypto and commodities remain noticeably weaker than stock indices.
- Breakout levels matter more than ever in the small caps, especially where liquidity and sentiment can change fast.
If there is one broad takeaway, it is that equities still have enough technical support to keep the rebound going, while crypto, gold and oil are not yet showing the same resilience. Stock selection remains crucial, and the better charts are the ones holding trend support while momentum improves at the same time.
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.
