Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are the FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, WTI Crude Oil, Arc Minerals, East Star, Gattaca, Iofina, Mendell Helium, Pantheon Resources, and TinyBuild.
It is a relatively sleepy Monday morning in the market, but there is still plenty to work with. The main theme is whether key support levels can hold as the market navigates the noise around the Federal Reserve announcement.
Across the indices, the approach is straightforward: respect the trend channels, watch the 50-day and 200-day moving averages, and don’t get too excited until resistance breaks cleanly. Bitcoin remains a range trade, crude oil is showing real strength, and a handful of smaller stocks are setting up rather nicely.
As always, do your own research and treat these as chart-based observations rather than hard recommendationsend-of-day
FTSE 100: Looking for 10,850 if Channel Support Holds
The FTSE 100 remains within a rising trend channel. The floor of that channel has emerged around 10,600, and the market has bounced from that area.
The immediate obstacle is the 50-day moving average at roughly 10,738. A sustained move above that level would put the late-July resistance area near 10,850 back in play later in the week.
There is always downside risk, particularly heading into the Fed announcement. A failure below the channel floor could open the way towards July support around 10,400, where the 200-day moving average sits just underneath. That would be a neat area for a dip, similar to the pullbacks seen in March and June.
- Support: 10,600, then 10,400 and the 200-day moving average.
- Initial resistance: 10,738 at the 50-day moving average.
- Upside target: 10,850 at late-July resistance.
DAX: A More Fragile Setup Below the 50-Day Average
The DAX is trying to hold the floor of a rising trend channel that has been in place since March. That support is around 25,300.
The complication here is that the 50-day moving average is falling, and there has been another RSI failure around the neutral 50 level. That weakens the near-term technical picture and suggests that a gap fill towards 25,100 is quite possible.
If selling continues, the July support area and 200-day moving average near 24,700 could come into view. On the upside, an end-of-day close above the 50-day line at approximately 25,700 would be the first meaningful sign of a reversal.
That would reopen the prospect of a move towards the top of the rising channel at 26,800 by the end of next month. It feels a long way away at present, but that is the technical framework.
- Channel support: 25,300.
- Likely gap-fill area: 25,100.
- Major lower support: 24,700.
- Turnaround signal: A close above 25,700.
- Channel target: 26,800.
Dow Jones: July Support Needs to Do the Business
The Dow has bounced from the mid-July support zone around 52,000. As long as that area remains intact, the preference is for a move through the 50-day moving average just below 53,000.
A break through that line would target August resistance near 53,400 by the end of the week, assuming the market can negotiate the Fed-related volatility.
The trend channel can be widened to accommodate last week’s lows, which gives the 52,000 area added importance. Below that, the lower parallel of the channel and the 200-day moving average are sitting just below 50,000.
- Key support: 52,000.
- Near-term resistance: Just under 53,000.
- Upside target: 53,400.
- Deeper downside reference: 50,000.
Bitcoin: Buying the Bottom of the Range
Bitcoin has moved around over the weekend but is bouncing again. The chart remains a fairly clear range situation, with the floor between 75,000 and 76,000.
The technical backdrop remains constructive. Both the 50-day and 200-day moving averages are rising, while the RSI has produced a double bounce around the neutral 50 area. That supports the idea that buying near the bottom of the range remains the sensible strategy.
The upside objective is a retest of 82,000. Until that level breaks decisively, this is still a range rather than a full-blown breakout story.
- Range floor: 75,000 to 76,000.
- Range target: 82,000.
- Technical backdrop: Rising 50-day and 200-day moving averages, plus a double RSI bounce.
For a general explanation of why traders use moving averages and RSI to assess momentum and trend strength, see Investopedia’s guide to moving averages and its overview of the relative strength index.
Ethereum: Range Trading Continues Unless 2,580 Breaks
Ethereum’s weak weekend action appears to have reversed, leaving it in a relatively contained range for now.
The key resistance is 2,580. An end-of-day close above that level would suggest a move towards 2,900, which is the top of the rising trend channel running from February.
On the downside, the range floor is around 2,360. If Ethereum rolls over again, it may test resistance turned support around 2,160, with the 50-day moving average near 2,197.
- Range floor: 2,360.
- Breakout trigger: An end-of-day close above 2,580.
- Breakout target: 2,900.
- Lower support area: 2,160 to 2,197.
Gold: The 50-Day Moving Average Is the Magnet
Gold is not looking quite as comfortable as Bitcoin. The price is struggling within its rising trend channel, and two RSI failures around the neutral 50 level point to the likelihood of further weakness first.
The obvious magnet is the rising 50-day moving average at 4,271. Any dip towards that area is currently regarded as a buying opportunity, largely because a rising 50-day line should offer support if the broader trend remains in place.
On the upside, a move towards 4,539 and the 200-day moving average is the longer-term objective, perhaps by the end of the month or afterwards. It looks distant from here, so the immediate focus remains on whether 4,271 can hold.
- Potential dip-buying area: 4,271 at the rising 50-day moving average.
- Longer-term upside reference: 4,539 and the 200-day moving average.
- Near-term concern: Repeated RSI failures.
Crude Oil: $100 Reached, With 102 the Immediate Target
Crude oil has reached $100 on the spread-betting market, and the move has been strong. The initial chart target remains the top of the rising trend channel from June, around $102.
Above $102, the next major upside area is $115 to $116. The geopolitical backdrop is adding to the bullish case, with the expectation that there will be no near-term resolution to the Iranian situation before the midterms. That keeps the prospect of persistently high oil prices firmly on the table.
Even if oil breaks down, the expectation is not for a major collapse. The first downside zone would be $98 to $99, while a more aggressive shakeout could reach $93, which had acted as resistance earlier in the month.
- Current milestone: $100.
- Initial channel target: $102.
- Higher target: $115 to $116.
- Expected downside support: $98 to $99, then $93 in a deeper pullback.
Small-Cap Share Setups
- ARC Minerals: A Constructive Consolidation Above Key Averages: ARC Minerals has the sort of chart setup that would normally be expected to produce a strong move higher. The shares are shuffling sideways above a rising 50-day moving average around 0.63p, while also remaining above the 200-day moving average. That combination gives the chart a constructive look. The best-case target is the top of the rising channel near 0.92p by the end of next month, provided the price continues to hold above the 50-day line.
- East Star Resources: 10.5p First, Then 16p Could Be the Autumn Prize: East Star remains the celebrity investor stock of the moment, with continued news around stake building helping the shares edge higher. The first technical target is the top of the current channel at 10.5p. For those looking further ahead, the developing trajectory points towards an area around 16p, potentially as a November or year-end objective. That is a more ambitious target, especially after the recent straight move higher, so it makes sense to keep feet on the ground. While the shares remain above former resistance at 8p, 10.5p is the near-term objective.
- Gattaca: A Strong Setup Above 150p: Gattaca is in a good technical position. The fundamentals appear supportive, while the chart has pushed through a rising 50-day moving average after bouncing above a rising 200-day moving average. That is a strong combination. The top of the broadening triangle sits around 186p, which looks achievable by the end of next month. The key condition is staying above recent support around 150p. Above that level, the outlook remains for 180p plus.
- Iofina: Holding 50p Keeps 70p in Play: Iofina is consolidating sideways at the floor of a rising trend channel dating back to last November. The top of that channel points towards 70p, potentially by the end of November. A cautious approach would be to wait for an end-of-day close through the 50-day moving average, just under 54p, before treating the move as a confirmed new leg higher. The RSI has already pushed back above its neutral 50 level, which is encouraging. Most importantly, the longer the shares remain on the right side of 50p, the greater the chance of a move towards 70p over the next couple of months.
- Mendell Helium: Production News Adds to the Momentum: Mendell Helium has mentioned the all-important word, production. In the current small-cap environment, that is notable, and the chart is responding accordingly. The shares have bounced from a rising 50-day moving average, are trading above rising 50-day and 200-day lines, and have gapped higher. The chart may justify widening the trend channel, with the upper boundary as high as 8.5p. Above the 50-day moving average around 4.7p, the working target is 8p by the end of November or perhaps the end of the year.
- Pantheon Resources: Funding Comfort and an 18p Technical Target: Pantheon Resources has the benefit of well-connected backers, including Michael Spencer and Oak Securities, which helps remove doubts around funding possibilities. The shares have gapped higher following the latest RNS. The next key test is the 50-day moving average around 12.8p. A break above it would target the top of the broadening triangle and May resistance at 18p. With oil at $100 a barrel, being sat on a significant oil resource is a helpful place to be, even before production. The upside case remains valid while Pantheon stays above the floor of the recent gap around 10.5p.
- TinyBuild: A Potential Big Move After a Long Decline: TinyBuild may be relatively obscure, but it has the potential to become a much more significant stock over time. The shares are rising above a rising 50-day moving average after a period of consolidation. The minimum target is 15p by the end of next month, although the current rate of progress could support something more ambitious. The shares have already fallen a long way, which makes the developing recovery chart worth noting. The bullish view remains valid while TinyBuild stays above recently broken resistance at 11p.
Levels Matter More Than Noise
The Fed announcement may create plenty of noise, but the charts have already provided the levels that matter. For the major indices, it is all about whether channel floors and moving averages can hold. For Bitcoin and Ethereum, range boundaries remain the obvious trading markers. In oil, strength above $100 keeps the higher channel targets alive.
Among the smaller stocks, the common thread is clear: rising moving averages, reclaimed support and consolidation above key levels. ARC Minerals, Gattaca, Iofina, Mendell Helium, Pantheon Resources and TinyBuild all have defined technical levels where the positive setups remain valid.
Keep it simple. Respect support, wait for proper breaks through resistance, and do not lose sight of the bigger chart picture.
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.
