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, Ajax, Critical Metals, 80 Mile, Fragrant Prosperity, Gunsynd, Huddled, Halo, Mobico, Reveille, S4, THG.
The FTSE 100 is climbing a wall of worry, Bitcoin is hanging on to an important moving average, and several smaller companies are delivering the sort of breakouts that make charting worthwhile. Plenty of upside potential remains, but the distinction between a promising setup and a confirmed move still matters.
The common thread in this 16 October rundown is the 50-day moving average. Some markets are holding above a rising line and looking towards fresh highs. Others are still struggling to reclaim it. That gives us a useful dividing line between confidence and caution.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Stock Market Indices: FTSE Leads, DAX and Dow Face Resistance
FTSE 100: An 11,000 Target While Support Holds
The FTSE 100 remains inside the rising trend channel running from March. It has broken the July resistance line and moved above its 50-day moving average at approximately 10,715. While it stays above that moving average, the focus is on the top of the channel and potential record highs around 11,000.
That is a fairly impressive performance given the concern ahead of the Budget, particularly for banks. With banks such a significant constituent of the index, the FTSE is doing a decent job of climbing that wall of worry.
The alternative is a rug pull towards the channel floor at around 10,450. That is the downside scenario to keep in mind, rather than the expectation while the 50-day line holds.
DAX: First Clear 25,700, Then Think About the Highs
The DAX has finally broken its September resistance line near 25,300. That has brought it close to the initial objective, the 50-day moving average at approximately 25,700.
A move through that average would open up the prospect of a return towards the year’s highs above 26,500, around the top of the channel running from the start of the year. For now, though, getting through the moving average is the immediate job.
On the downside, the channel floor running from April sits near 24,900. That area could provide support for a third time if the recovery falters.
Dow: A Second Attempt at the 50-Day Line
The Dow is having another go at its still-falling 50-day moving average around 52,500. Until that barrier gives way, there remains a risk of a test of the channel floor near 51,100.
There has, however, been an improvement in momentum. The relative strength index, or RSI, has pushed through its neutral 50 level to approximately 55. That is a positive development over the preceding day or two. For context, the RSI is a momentum indicator, so its improvement adds support to the recovery argument without removing the price resistance overhead.
The upside ambition is a return towards 54,000 by the end of October, or failing that, by the end of November. Clearing the 50-day line would make that case rather more convincing.
Cryptocurrencies: Bitcoin Holds Support, Ethereum Still Has Work to Do
Bitcoin: The Rising 50-Day Average Is the Key
Bitcoin looked a little suspect earlier in the week, but it has at least managed to remain above its rising 50-day moving average near 81,100.
Above that level, the initial objective remains 87,000 by the end of October. The best-case extension is towards 97,000 by the end of November, corresponding to the top of the rising trend channel running from February.
The reservation is momentum. RSI is just below neutral 50 and appears to be on the wrong side of its own uptrend line. It is not an entirely clean setup, but while price remains above the rising 50-day average, the 87,000 target stays in play.
Ethereum: Range Support Holds, but the Average Remains Overhead
Ethereum is still battling to reclaim its 50-day moving average around 2,550. It has not managed that yet, although the lower end of the range near 2,380 has been tested.
The condition here is an end-of-day close above 2,380. While that support holds, the recovery objective is approximately 2,610, the top of the range that preceded the late-September rally.
Unlike Bitcoin, Ethereum has yet to get back above its moving average. Holding the range floor is constructive, but clearing 2,550 would be the next useful step.
Commodities: Gold Remains Awkward, Oil Looks More Constructive
Gold: A Recovery Attempt, Not Yet an All-Clear
Gold remains something of a problem child. It has spent an extended period basing along the uptrend line running from late June, around 4,110, but it is still difficult to say whether a convincing recovery is finally under way.
There has been a break of the late-August resistance line near 4,150. Above that level, the best-case recovery target is the 50-day moving average around 4,331 by the end of November.
The warning level is 4,100. A sustained move below it would bring a target under 4,000, around the old July support area, back into consideration.
WTI Crude Oil: A Close Through $99 Would Strengthen the Bull Case
Crude oil has been difficult to get a handle on, but the bullish argument appears to be gaining ground. Price has pushed above the channel boundary around $97, leaving the top of the gap near $99 as the next important hurdle.
An end-of-day close above $99 would point towards $105 or more by the end of October.
On the downside, the working expectation is that the 50-day moving average around $91 provides the lower limit of any setback. That gives the setup a clear reference point while oil attempts to complete its breakout.
Smaller-Cap Shares to Watch
- Ajax: CEO Buying Helps the Break Above 7.25p: Some CEO share buying has done Ajax no harm at all. The shares have pushed through the rather pesky 7.25p area, leaving the top of the channel around 13p by the end of November as the upside objective while that breakout holds. Both the 50-day and 200-day moving averages are rising towards a potential golden cross, where the shorter average crosses above the longer one. That can be one of the stronger phases of a bullish chart cycle, and it adds interest to the price breakout.
- Critical Metals: The Next Reference Point Is 84p: Critical Metals has outperformed expectations to the point where keeping up with the targets has become the challenge. With several previous objectives already passed, the next substantial reference is the 2024 peak around 84p. The condition is straightforward: above 54p, the target is 84p by the end of November. After such a strong move, that previous target at 54p becomes an important level to retain.
- CleanTech Lithium: Looking for a Break Through 7.3p: CleanTech Lithium looks constructive ahead of its planned ASX dual listing. Technically, the shares have held above a rising 50-day moving average since the middle of September. The next task is to break out of the recent range through 7.3p. If that happens, the objective is 8.4p by the end of October, an area that provided resistance during the decline in May.
- 80 Mile: A Bounce From the 200-Day Average: 80 Mile has bounced from its 200-day moving average and the previously broken March resistance line around 0.93p. While the shares remain above that area, the objective is a retest of the year’s best levels, through 1.6p by the end of November. The attraction here is the combination of moving-average support and an old resistance line now acting as a floor.
- Fragrant Prosperity: Still Waiting for the Proper Breakout: Fragrant Prosperity remains one of those charts where the expectation is that, one day, the shares will properly pop. That has not happened yet, but repeated bounces from the daily uptrend line around 0.38p keep the setup interesting. The trigger is a decisive break of the 2025 resistance line near 0.45p. If that gives way, the upside objective becomes 0.6p or more by the end of November. Until then, it remains a breakout candidate rather than a completed breakout.
- Gunsynd: Approaching the First Target: Gunsynd appears to be changing its emphasis from an investment company towards a more operational explorer and developer. The chart has been responding well, with the shares just shy of the initial 0.14p target. Above 0.14p, the next objective is the main resistance area around 0.18p by the end of November. Ideally, the shares remain on the right side of 0.12p throughout.
- Huddled: A Recovery That Continues to Deliver: Huddled has been one of the better calls, which is just as well given the strength of the recovery. The shares broke their resistance line at the end of August and have since been rising above a rising 50-day moving average. The earlier target around 0.75p has been reached. Above that, the next reference is the 200-day moving average near 0.98p, with a best-case extension towards 1.25p by the end of November. That higher level corresponds to resistance encountered during the March decline. For the immediate setup, the preference is to remain above 0.8p.
- Halo: Back Above an Important Old Level: Halo delivered a decent update on 16 October. Perhaps the shares might have been expected to respond a little more enthusiastically, but the useful technical development is the move back above the old June support area around 7.9p. The upside objective is the top of the range, as high as 10.3p by the end of October.
- Mobico: A Range-Bound Share Starts to Stir: Mobico does not always command much charting attention because it has generally been stuck in a range. This time, however, it has broken the resistance line running from September around 25.25p. Above that level, the target is 32p, potentially as soon as the end of October. Holding the broken resistance would help distinguish a genuine improvement from another move within the broader range.
- Reveille Resources: The 16p Target Has Arrived: Reveille Resources has delivered a particularly strong move since breaking through its 50-day moving average around 6.5p at the end of September. The shares have now reached 16p, the target at the top of the rising channel based from July. That is one where a modest bow seems reasonable. The question now is what comes next. A sustained move above 16p would bring the upper parallel of the rising channel into play, potentially as high as 26p. That is an ambitious extension, rather than something to take for granted. The previous target around 11p is the important support reference. Remaining above it would preserve the stronger backdrop for further attempts higher.
- S4 Capital: A Move Towards 69p Is in Play: S4 Capital is rather larger than the usual small-cap fare, but its chart is worth noting. The shares have pushed above a rising 50-day moving average and recent resistance around 51p. Above 51p, the objective is the top of the channel near 69p over the following two to four weeks.
- THG: The Gap Higher Brings 38p Into Focus: THG has gapped up through its 50-day moving average and reached the 200-day moving average around 33p. A move above that longer-term average would bring a best-case target of 38p by the end of October into play. Ideally, the shares stay above the broken resistance line just below 33p. That is the immediate level to retain if the gap higher is to become something more durable.
The Common Thread: Respect the Level That Makes the Target Possible
There is no shortage of attractive upside targets here, from the FTSE 100’s potential record high to the sharper moves in smaller companies. But the useful part of a chart is not simply the highest number on it. It is the relationship between the target, the breakout trigger and the support that keeps the setup intact.
For Bitcoin, that means the rising 50-day moving average. For oil, it means a closing break through $99. For shares such as CleanTech Lithium and Fragrant Prosperity, the key resistance still needs to be cleared. The targets become more meaningful when those conditions are met, not before.
Important: This commentary is for information only and is not investment advice. Independently research and verify any information before relying on it, and seek professional financial advice where appropriate. Vox Markets is not regulated under UK financial services law.
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.
