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, Avacta, Critical Minerals, East Star, Galantas, Great Western, Kendrick, Medpal, Orosur,
Markets are sitting at some important technical junctions. The FTSE 100, DAX and Dow are all attempting to hold their respective rising-channel floors, while Bitcoin and Ethereum have been knocked by regulatory disappointment. Gold is trying to stabilise, and crude oil remains the market of the moment.
On the small-cap side, several charts remain constructive, with breakouts, rising moving averages, and RSI rebounds providing the key signals. As ever, the levels matter. A chart can look strong right up until it loses support.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: Holding the Rising Channel Floor
The FTSE 100 has bounced from the floor of its rising trend channel, which was widened slightly in recent sessions. The immediate level to watch is 10,600 on an end-of-day closing basis.
As long as the index holds above that area, the upside targets are:
- 10,739 at the 50-day moving average
- 10,850 near the late-July resistance line
If there is a proper rug pull, the more likely downside destination is the 200-day moving average and the mid-to-early July support zone near 10,400.
The RSI remains below the neutral 50 level but is trying to recover. That is at least mildly encouraging. Despite the surge in oil prices, the FTSE has stayed relatively firm, helped in part by its heavyweight oil constituents.
DAX: Still Dancing Around Support
The DAX remains close to the floor of the rising trend channel that has been in place since March. The nominal channel-floor level is around 25,400, with the market trading either side of that line.
Initial resistance is the 50-day moving average at 25,746. On the downside, there is a July gap-support area around 25,100, which was narrowly avoided recently.
A deeper sell-off could bring the 200-day moving average into play at 24,752. That line acted as support in May and June, so it is the obvious rescue zone if the market weakens further.
The RSI is in the upper 30s, which leaves room for another day or two of downside before a more convincing recovery can take hold.
Dow: A Fed Decision Could Decide the Next Move
The Dow is also sitting at the floor of a rising trend channel, around 52,000. The Federal Reserve decision is the immediate macro event in focus, especially given the prospect of a rate rise.
Above 52,000, the next upside target is the 50-day moving average at 52,938. However, the downside setup is not especially comfortable.
- The 50-day moving average is falling.
- The market gapped down earlier in the month and has not filled that gap.
- The RSI has failed below 50 and broken its prior uptrend line from March.
Those RSI signals suggest a test of the July support region near 51,500 is likely. That is the preferred downside area if a rug pull arrives, rather than a move materially below it.
Bitcoin: Crypto Clarity Disappointment Hits Sentiment
Bitcoin has been unsettled by the failure of the Crypto Clarity Act to pass. The price has slipped out of its recent channel, although it is still only just holding within the broader trading range.
The key floor is the recent low around 75,000. While Bitcoin holds above that, there is still a case for a recovery through 82,000, opening the way towards the top of the broadening triangle from February near 94,000.
That remains the more ambitious scenario for the end of next month. The nearer-term risk is to the downside, particularly while Bitcoin remains below the broken trendline around 77,000.
The 50-day and 200-day moving averages are both rising, which remains constructive over the medium term. However, there is also an unfilled gap from last month near 70,000 to 71,000. With RSI slipping below 50 to around 47, a test of the 50-day average and that lower support region cannot be ruled out.
For a useful background on how the Relative Strength Index is typically interpreted, the 50 level is often treated as an important dividing line between positive and negative momentum.
Ethereum: 2,350 Is the Crucial Near-Term Floor
Ethereum is still just about holding inside its recent range and channel. The floor of that channel is around 2,350, closely matching the recent low at 2,358.
While Ethereum remains above that level, the bullish case is for an upside break from the range. An end-of-day close above 2,570 would point towards the February channel top near 2,900.
If 2,350 gives way, the next obvious area is the 50-day moving average at 2,216. That is the level where patient buyers may prefer to have limit orders waiting rather than chasing a move higher.
Gold: Trying to Build a Bear-Trap Recovery
Gold has struggled lately, not helped by the prospect of higher interest rates. Even so, it has bounced at and slightly below the 50-day moving average around 4,280.
That response is what was needed. The 4,280 area also coincides with the floor of the rising channel in place since June. Gold briefly dipped below early-September support near 4,282, so the recovery has the look of a potential bear trap.
Above 4,280, the immediate objective is a retest of recent resistance near 4,430 to 4,440. The best-case target into the end of next month is the 200-day moving average at approximately 4,540.
Caution is still required. RSI needs to reclaim the neutral 50 area from its current reading near 46 before the recovery can be treated as more than an early bounce.
WTI Crude Oil: The Market of the Moment
Crude oil remains the standout market. WTI is holding above the upper boundary of the rising channel from June, around 102.
Above that breakout level, the next target is 115, the upper parallel of the channel. That target could be reached by the end of next month, or potentially sooner if momentum remains strong.
A move to 115 would take oil back to, or close to, its highest level since the Iran conflict began. The psychological importance of 100 should make it difficult for the market to fall back below that figure without a meaningful shift in sentiment.
If a correction does emerge, old June resistance around 97 should now act as support.
Small-Cap Share Charts
- Avacta: A Breakout Call Arrives Ahead of Schedule: Avacta has delivered a textbook charting move. The shares broke above neckline resistance at 72p, with an original target in the early 80p area by the end of the month. That target has arrived ahead of schedule. The shares also gapped through former resistance. If that gap can be held, and especially if the price remains above 80p, there is scope for a move towards 100p, the top of the one-year rising trend channel, by the end of next month.
- Critical Metals: 13p Is the Line in the Sand: Critical Metals has improved considerably. Both the 50-day and 200-day moving averages are rising, and the chart is now targeting a minimum move towards 15p. The more ambitious objective is the upper parallel of the rising trend channel from last year, as high as 24p by the end of next month. The main condition is that shares hold above the broken-resistance area around 13.75p. In practical terms, remaining above 13p keeps the 24p target alive. The main downside risk would be another test of the 200-day moving average at 10.4p.
- East Star: Celebrity Backing Supports the Higher Range: East Star has been holding up well at higher levels, helped by its celebrity investor backing. The shares are approaching the second upside target at 10.4p, following the earlier move through the 6.75p area. Above 10.4p, the next projection is significantly more ambitious: 16p by the end of next month. That is based on a resistance-line projection dating back to October 2023. The upside case remains valid while the shares hold above initial September resistance at 8.3p. Any dips towards that level can be treated as potential buying opportunities, provided the support remains intact.
- Energy Pathways: A Disappointing Pullback, but 7.17p Holds the Setup Together: Energy Pathways has pulled back to test the old resistance line around 8p, which is disappointing after the initial spike. Still, the structure remains constructive while the shares are above the rising 50-day moving average at 7.17p. Holding that moving average leaves room for a renewed break higher, with a possible target in the 10p to 12p range by the end of next month.
- Galantas: Stay Above 25p for a Move Towards 38p and 50p: Galantas is benefiting from the improvement in the gold price. The shares are trading above rising 50-day and 200-day moving averages, with the two averages rising in parallel. That is a very constructive technical look. The key requirement is to stay above the 50-day moving average at 25p. If that level continues to hold, the first target is a retest of the December price-channel top at 38p. The best-case scenario is a move towards 50p by the end of next month, representing the upper parallel of the rising trend channel. The message is simple: stay above 25p and the recovery chart remains in good order.
- Great Western: Break 4.1p and the Channel Top Comes Into Play: Great Western has been one of the more encouraging recovery and reboot stories of the year. The shares have gapped higher and are having another attempt at breaking overhead resistance. The level that needs to be cleared is 4.1p, ideally on an end-of-day or weekly closing basis. A sustained move through that area would point towards the top of the range near 6p by the end of next month. The technical foundations are supportive. The shares are bouncing from a rising 50-day moving average, the 200-day moving average is also rising, and the latest news flow has added to the positive tone. The immediate priority is holding the upside gap and converting 4.1p from resistance into support.
- Kendrick: Can the 30-Bagger Find Another Breakout?: Kendrick has been one of the year’s standout risers, up around 30 times so far. The shares are now attempting to break a resistance line from June. Above 8p, the chart suggests a fresh leg higher towards 12p by the end of next month. After such a substantial rise, volatility should be expected. But technically, this could be the point where Kendrick attempts to build on an already exceptional year.
- MedPal: Gap-Fill Rebound Keeps 10p in Sight: MedPal has been one of the stronger fundamental improvement stories, with interest in GLP-1 treatments helping to frame the wider sector narrative. The shares have staged a rebound after filling a gap around 5.5p. While that level holds, the first objective is a revisit of the prior target line at 6.3p. The best-case chart scenario is a move towards 10p by the end of next month. The gap floor at 5.5p is the critical support level to preserve if that bullish projection is to remain credible.
- Orosur: Rebounding From the Lows Towards 21p: Orosur, another celebrity investor-backed situation, had looked concerning as the shares drifted down towards the annual lows around 13p. The recovery from that weakness has improved the picture. The shares have rebounded above the 50-day moving average around 15.5p. Holding that level brings the 200-day moving average near 21p into view as the next target over the coming days. The setup has gone from looking vulnerable to looking potentially recoverable. As with the other names, support has to hold. In this case, that means respecting the 15.5p area.
The Levels That Matter Most
The broader market picture remains finely balanced. Equity indices are testing channel floors, crypto is dealing with regulatory disappointment, gold is trying to confirm a bounce, and oil continues to power higher.
For the individual charts, the common theme is straightforward: breakouts need to hold, rising moving averages need to remain intact, and RSI rebounds need to build rather than fade.
Technical analysis is about probabilities, not certainties. The levels above offer a framework for judging whether momentum is improving or whether a rug pull is gaining the upper hand.
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.
