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, Aoti, Amala Foods, Calnex Solutio, Cindrigo Hold, Catenai, Energypathways, Galantas Gold, Headlam Group, Panther Metals, Quadrise, Seeing Machines, Tamar Minerals
It was one of those end-of-week setups where plenty of markets looked as though they were coiling for the next move rather than delivering it outright. A few major indices are trying to reclaim key moving averages, crypto remains constructive, crude oil is volatile but still tradable, and a cluster of London small caps continues to throw up the more interesting chart patterns.
The main theme at the moment is fairly straightforward: several instruments are sitting near important trigger levels. If those levels break on a closing basis, there is room for decent upside. If they fail, many of them still look like range trades rather than outright disasters.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100: flat finish, but still constructive above the range floor
The FTSE 100 ended the week in reasonable shape, even if Friday itself was basically flat. That came after a strong Thursday candle and then a hammer-style finish into the end of the week, so the near-term picture is not bad at all.
The key level for the start of the new week is the 50-day moving average at 10,411. What matters here is an end-of-day close above that line. If that happens, the obvious next objective is the top of the falling trend channel that has been in place since late February. That gives a target of roughly 10,600.
On the downside, the floor of the channel is sitting near 10,200, which also lines up with the low of the recent range. So for now the FTSE still looks boxed in between support around 10,200 and resistance around the 50-day line.
If you use the RSI as a guide, it is sitting just below the neutral 50 level. That supports the idea of a range trade unless and until the index can close decisively back above the 50-day moving average.
DAX: key reversal suggests a retest of the April peak
The DAX finished its week on Thursday because of the May Day holiday, but the last chart signal was encouraging. The market printed a key reversal to the upside, effectively a bear-trap rebound, and it also bounced from the floor of a gap left earlier in April around 23,700.
That improves the near-term outlook considerably. The setup now points towards at least a retest of the April peak at 24,800, potentially in the first or second week of May.
The RSI has also recovered from the 50 area and is now around 57, which adds to the sense that the DAX is looking better than it has for quite some time.
Dow Jones: 50,000 remains the big psychological level
The Dow has been pressing right up against the 50,000 level, which still feels a remarkable place for the market to be given the broader geopolitical backdrop.
One reason for that resilience is the relative insulation of the US economy from the oil shock compared with some other regions, thanks to domestic oil production. That does not remove risk, but it helps explain why the market has held up as well as it has.
Technically, the trigger is simple. If the Dow can secure an end-of-day close through 50,000, the next upside objective becomes 52,200 by the end of May.
If it cannot break higher, the fallback support to watch is the 50-day moving average at 47,860. That area also lines up with the old breakout line from the February resistance trendline, which was broken in April. In other words, it should be solid support if the bullish structure remains intact.
Bitcoin: still pushing at 80,000, with the 200-day line in sight
Bitcoin has staged a good recovery from the 60,000 area seen back in February, and it is now repeatedly testing the 80,000 level.
What is especially notable on the chart is that the market has not yet suffered the sell-off from the top of the recovery channel that might normally have been expected. A setback of that kind looked overdue, perhaps as far back as the middle of March, but it simply has not materialised.
That leaves Bitcoin in an interestingly resilient position. If it can break through 80,000, the next technical target is the 200-day moving average at 83,600.
On the downside, the main support remains the 50-day moving average around 72,656. The RSI is near 60, which is healthy, and there is also the makings of an RSI uptrend line based around the low 50s. That adds to the impression that momentum remains constructive.
Ethereum: less impressive than Bitcoin, but still alive above the 50-day line
Ethereum has lagged Bitcoin somewhat. The recovery has been less convincing, and the chart is still wrestling with two obstacles:
- the rising 50-day moving average
- the falling trend channel that has been in place since August
The top of that falling channel is around 2,300, and until that gives way, Ethereum is likely to feel heavy compared with Bitcoin.
There is also a longer-term rising channel from late February, with the upper boundary pointing towards 2,535. That target feels a long way off right now, but it stays valid while price remains above the 50-day line at 2,216.
So this is not a glamorous setup, but it is still a live one. Hold above the 50-day average and the 2,500 plus target remains on the table.
Gold: a disappointing month and growing risk below 4,500
Gold has been one of the more disappointing charts of late. April was fairly lifeless, and while there was a rally back towards the 50-day moving average, it failed before actually reaching it.
The broader shape remains a falling trend channel, with resistance around 4,730. Unless that is reclaimed, the pressure stays to the downside.
The level to watch underneath is the low from the middle of last week, around 4,500. A close below that would strongly suggest a move towards the 200-day moving average at 4,277.
In short, gold needs to hold 4,500 to avoid turning a disappointing consolidation into a more obvious correction.
WTI crude oil: volatile range, but still a buy on dips above $98
Crude oil has pulled back from the stronger levels seen recently. The market had been threatening a move through 105 and perhaps even on towards 108, but that push has faded.
For now, oil looks trapped in a broad and volatile range between roughly $95 and $110.
The key message here is:
- Above $98, the bias remains towards a return to $110
- Below $98, there is room for a retreat towards the 50-day moving average at $91
The RSI still favours a buy-on-dips approach, particularly on moves back towards the old $98 resistance, which now looks more like a pivot level than anything else.
It would likely take a lot to sustain prices above $110, while a move back below $90 probably requires a far more dramatic easing of geopolitical tensions.
Small – Caps
The London small-cap list is where things get more speculative, more colourful, and in some cases much more interesting from a charting perspective. Several names are showing recovery patterns, bullish gaps, or classic trend-channel setups.
AOTI: recovery gap points to 70p, with 90p possible later: AOTI has started making increasingly regular appearances simply because the chart keeps improving. The shares produced a strong recovery gap through the 200-day moving average and have already met the first upside objective at 48p. Above that, the next target is 70p by the end of May. The reason this is interesting is that there is not much visible chart resistance between 70p and the old gap area near 90p. If momentum continues, 90p could easily become a target for the end of June, if not sooner.
Amala Foods: ugly ride, but broadening triangle offers a bull case: Amala Foods remains a spiky and uncomfortable chart, so it is not one for everyone. That said, there does appear to be a broadening triangle base in play. The near-term hope is that the shares can remain above 0.1p. If they do, there is scope for a move towards 0.18p later this month. Given how rocky the ride has been, that would be a notable recovery for the bulls.
Calnex Solutions: golden-cross style setup with 67p in sight: Calnex is not exactly a household favourite, but the chart is tidy enough. The price action is tracking a rising trend channel, with the top of the channel pointing towards 67p. That target is favoured while the shares hold above recent broken resistance at 55p. There are a few extra positives here: both the 50-day and 200-day moving averages are rising. The structure resembles a golden cross environment – RSI has delivered multiple rebounds from the 50 level.
Cindrigo Holdings: bear-trap gap reversal keeps 12p target alive: Cindrigo has been one of the more attractive reversal patterns. The chart looks like a bear-trap gap reversal, with the shares also bouncing from the rising 50-day moving average. The first target at 7p has already been reached. The next one is 12p by the end of May, with the 200-day moving average at 9.7p likely to be an intermediate hurdle. Of all the names on this list, this one stands out as a chart that simply looks pretty good on the face of it.
Catenai: bubbling under, with 0.4p to 0.45p as the best-case target: Catenai seems to be quietly building in the background. The notable missed feature previously was the way the shares were trying to break above the 200-day moving average just under 0.29p. That opens the door to a 0.4p to 0.45p target by the end of May in a best-case scenario. If you prefer the cautious route, the cleaner confirmation would be an end-of-day close through 0.3p, which was last month’s resistance.
EnergyPathways: another suspiciously well-timed move before news?: EnergyPathways has developed a bit of a reputation as a stock that often moves before the formal update arrives. In plain English, it has looked a little leaky. There was already one of those pre-announcement style moves last week, and then Friday delivered another bounce of more than 20%. That naturally raises expectations of fresh company news early in the new week. From a chart perspective, the target is the top of the rising trend channel at just under 9p by the end of May, provided the stock remains above the 50-day moving average at 5.9p.
Galantas Gold: strong candle off the 50-day line points to 64p: Even though gold itself has slipped back below 5,000, Galantas Gold still looks very well placed technically. The shares bounced from a rising 50-day moving average and produced a strong bullish candle on Friday, opening at the low and closing at the high. They also broke above recent resistance at 41p. That should set up a move towards 64p by the end of June.
Headlam Group: 45p is the trigger for a more serious recovery: Headlam normally struggles to generate much excitement, but the chart has improved after what was a pretty grim bear run into last month. The key level here is 45p. A daily or weekly close above that would strengthen the case for a more meaningful turnaround. If that breakout comes through, the upside target is 67p by the end of next month. The pattern is shaping up like a rounded reversal, and another positive is that the 50-day moving average has turned higher. That tends to be one of the first clues that the tone of a chart is changing.
Panther Metals: 130p near term, with bigger dreams in the background: There may be some very ambitious long-term chatter around Panther Metals, but the chart-based focus is more grounded. The shares are currently around 102p, and the top of the rising trend channel is moving towards 130p. That remains the target for the end of May.
Quadrise: rebound from the 50-day line could lead to 4p: Quadrise appears to be tracing out a rising trend channel base. The shares have bounced above the rising 50-day moving average at 2.38p, which keeps the bullish interpretation alive. Above that line, the target is 4p by the end of next month. It is a fairly clean technical setup and one to watch if the broader small-cap bid remains intact.
Seeing Machines: gap breakout suggests 5p plus could come quickly: Seeing Machines delivered one of the more decisive moves on Friday. The stock broke through the rising 200-day moving average at 3.69p, which immediately improves the chart. The next target is 5p plus by the end of May, and potentially sooner. What makes the move more significant is that the shares also closed above the top of a gap at 4.1p. That is an important technical development and could help pull the price quickly towards 5p or more. If momentum really builds, 6p plus by the end of next month is also feasible on the chart.
Tamar Minerals: rising channel points towards 10p over the summer: Tamar Minerals is one of the less familiar names on the list, but the chart itself is straightforward enough. The shares appear to be tracking a rising trend channel, with the upper boundary around 10p. The best-case timing for that move looks like the end of June, with a slower version perhaps stretching into July. The bullish view stays valid while the stock remains above the 50-day moving average at 3.85p.
What matters most this week
If there is one thing tying all of these charts together, it is the importance of confirmation. Plenty of markets are close to breakout points, but not all breakouts deserve to be trusted until they are confirmed on a closing basis.
The standout levels to keep in mind are:
- FTSE 100: close above 10,411 for 10,600
- DAX: 24,800 retest now looks likely
- Dow: close above 50,000 for 52,200
- Bitcoin: break 80,000 for 83,600
- Ethereum: hold above 2,216 to preserve 2,500 plus potential
- Gold: a break below 4,500 risks 4,277
- WTI crude: above $98 favours $110, below it risks $91
Among the small caps, several charts remain in recovery mode rather than fully established uptrends, but the technical patterns are there. Stocks like AOTI, Cindrigo, Seeing Machines and Galantas Gold probably look the most obviously constructive on pure chart shape, while names such as Catenai, EnergyPathways and Headlam are trying to move from “interesting” into “confirmed”.
As ever, these are chart-based observations rather than hard recommendations. Levels matter, closes matter, and the market still has a habit of making the obvious move feel much harder than it should. But there is enough strength across the board to suggest that, for now at least, the bulls still have something to work with.
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.
