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, Andrada, Delta Gold, Guardian Metal, Hays, Itaconix, Jersey, Ocado, Orcadian, Page, Robert Walters, Shuka, Shoe Zone.
Markets are giving mixed signals at the moment. There are some encouraging bullish consolidations, particularly in the FTSE 100 and crude oil, but the DAX and Bitcoin look more vulnerable. In the smaller-cap space, there are several recovery and breakout setups worth keeping an eye on, although not every chart is behaving itself.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: A Positive Consolidation Above the 50-Day Line
The FTSE 100 may not feel especially bullish, but the technical setup is better than the mood suggests. The market has bounced for five consecutive sessions and, until the latest session, remained above a rising 50-day moving average.
That creates an extended buy signal through positive consolidation. The key trigger is a daily close above 10,620, which would represent a breakout from the current range.
- Breakout level: 10,620
- Near-term upside target: 10,900 by the end of next month
- Best-case target: 11,000, near the upper boundary of the March rising channel
- Key downside floor: just below 10,400
- Longer-term support: the rising 200-day moving average near 10,170
The RSI is sitting comfortably in the mid-50s, which is constructive rather than overbought. The rising 200-day line also supports the underlying positive picture. A move to 11,000 may sound ambitious at present, but the chart remains biased higher as long as the March channel floor holds.
DAX: Underperforming and at Risk of Further Weakness
The DAX has been weaker than the FTSE 100. It has broken out of a falling trend channel but remains below its 50-day moving average, around the 24,800 area. That leaves the market exposed to a decline towards the 24,350 zone.
The RSI is around 43, clearly below the neutral 50 level. There have also been two recent failures around RSI 50, which is not the sort of momentum action that supports a sustained recovery.
- Immediate risk: a move towards 24,350
- Recovery trigger: a break back above 25,200
- Potential upside gap-fill target: 25,400
Unless the DAX can reclaim 25,200 swiftly, the path of least resistance appears to be lower.
Dow Jones: A Stronger Market, but Still Stuck in a Range
The Dow has held up better than the DAX, but it is still trapped between the June uptrend line near 52,000 and recent resistance around 53,300. Until one of those levels gives way, there is not much to get excited about.
The RSI remains in the upper 50s and has stayed above its March uptrend line around 56. That is a strong setup and leaves the Dow primed for an upside break. The danger is that failure to clear 53,000 soon could turn the range into a drawn-out and painful top.
- Range support: 52,000
- Range resistance: 53,300
- Momentum signal: RSI remains constructive above its rising trend support
Bitcoin: Failed 50-Day Line Test Raises Downside Risk
Bitcoin has been drifting lower and has now slipped back below the 50-day moving average, around 63,600. A failed attempt to regain that indicator is not encouraging.
Initial support sits around 61,000, but the more important chart level is the projected March support line near 57,000. Unless Bitcoin can regain the 65,000 to 66,000 area, that lower target looks increasingly likely.
- 50-day moving average: approximately 63,600
- Initial support: 61,000
- Major downside target: 57,000
- Recovery resistance: 65,000 to 66,000
The RSI is below 50 and has posted three recent failures around that neutral level. That adds to the negative technical backdrop.
Ethereum: Better Relative Strength, but Still Under Pressure
Ethereum made a better effort than Bitcoin to clear its 50-day moving average, but sellers appeared above that level. The chart is therefore facing the same broad issue as Bitcoin: a failed recovery through the 50-day line.
A break below the moving average would point towards 1,975, with initial support around 1,740. The one saving grace is the RSI, which remains above 50 near 56. That leaves Ethereum in slightly better shape than Bitcoin, at least from a momentum perspective.
- Near-term downside level: 1,975
- Initial chart support: 1,740
- RSI: near 56, still above neutral
Gold: Resistance at 4,050 Continues to Matter
Gold has disappointed recently, although the reaction from the 4,050 July resistance line has been technically tidy. The market turned lower after encountering that level, confirming its importance.
While gold remains below 4,050, the risk is a move down towards the 3,900 area. Recent support around 3,945 is the nearer level to monitor, but the broader focus is on whether October support near 3,900 can hold.
- Key resistance: 4,050
- Recent support: 3,945
- Main downside area: 3,900
Crude Oil: Bull Flag Setup Points Higher
Crude oil has not moved higher as quickly as expected, but that may actually be helping the chart. The current pattern resembles a mid-move consolidation, or bull flag, rather than a completed top.
A break above recent resistance around $81 could open the way towards $87, which is the upper boundary of the falling trend channel from March. The downside looks relatively contained, with the 200-day moving average sitting just above $74. In practice, the $77 to $78 area may be enough to hold any pullback.
- Breakout level: $81
- Upside target: $87
- Likely near-term support: $77 to $78
- Deeper support: just above $74 at the 200-day moving average
The RSI is around 56, a supportive reading that backs the case for a fresh $5 to $7 leg higher.
UK stock charts worth watching
- Andrada Mining: Breakout Through January Resistance: Andrada has broken through resistance around 3.09p and cleared a falling resistance line that had been in place since January. That is a strong technical development. As long as the shares remain above 4p, the target is the top of the rising channel from January near 4.8p by the end of next month. The move through the 50-day line is particularly encouraging and suggests the recovery has more substance than a brief bounce.
- Delta Gold: A Do-or-Die Moment Near Channel Support: Delta Gold had a strong run into the news earlier in the week, but the reaction afterwards was a sell-off rather than further buying. The likely explanation is that much of the market was already positioned ahead of the announcement. The shares are now sitting at the floor of a rising channel from March. The critical issue is whether support around 137p can hold. A recovery would put the 170p to 180p region back in play, but a falling 50-day moving average makes the picture more difficult.
- Guardian Metal: A Long-Overdue Pullback: Guardian Metal has had the stuffing knocked out of it after falling out of its rising trend channel. The anticipated support near 185p, around the 200-day moving average, has not held. The next significant line of support comes from September and sits around 137p. There has been some traction around that area, so the hope is that it can hold on a daily closing basis. If it does, a move back towards 180p may be possible by the end of next month.The pullback is concerning, but perhaps not entirely surprising. The shares had not experienced a meaningful correction since at least last October.
- Hays: An Unusually Strong Move: Hays has delivered a better move than expected. It is not always the easiest share to get excited about, but the breakout through resistance last Friday has continued impressively. The shares initially peaked around 42p, then pushed higher. The best-case target is now 61p, near the former resistance area that followed October. The chart remains constructive while the price stays above 50p, a level that previously acted as resistance during January and February.
- Itaconix: Above 137p, the 170p Zone Comes Into View: Itaconix has had a positive update and the chart has responded well. The shares reached 144.5p, just short of the upper channel line around 145p. While Itaconix remains above broken resistance near 137p, there is scope for a move beyond 145p and potentially towards 170p. That would bring the old 2025 resistance zone into focus.
- Jersey Oil and Gas: A Breakout With Scope for 160p: Jersey can be a volatile share and does not always behave itself, but the current setup is encouraging. A break through the resistance line around 112p could lead to a move towards 160p by the end of next month. The rising 50-day moving average adds weight to the recovery argument. A chart can only tell you what is possible, not necessarily what news might drive it, but this is a reasonable technical setup.
- Ocado Group: Back Above 165p and Targeting 188p: Ocado has been a beast in recent sessions. A key reversal lower threatened to spoil the setup, but the shares have bounced back and regained momentum. The earlier target was 150p to 160p, but the technical picture has improved. If the shares can maintain a close above the former support level at 165p, the next objective is a return to the falling resistance line from last August near 188p.
- Orcadian Energy: Recovery Potential Towards 18p: Orcadian has broken through recent resistance around 12.5p. The next level is 15p, but the more interesting chart target is the upper boundary of the falling trend channel near 18p by the end of next month. An intraday move and close above the 50-day moving average, around 13p to 13.3p, would provide further confirmation that a proper recovery is underway.
- Page: Breakout Above 148p Supports Higher Targets: Page has been moving well and has broken recent resistance through 148p. The minimum target is now 171p to 172p, which marks the top of the broadening triangle formation. If momentum continues, the best-case scenario is a move towards 212p by the end of next month. That would correspond with the upper parallel of the triangle stretching back to March.
- Robert Walters: Bull Flag Above a Rising 50-Day Line: Robert Walters makes a rare appearance because the chart has become more interesting. The shares have broken resistance around 92p and moved out of a bull flag around 105p. Above 105p and above the old April resistance, the chart points towards 136p by the end of next month. A bull flag above a rising 50-day moving average is often the sort of setup that can produce a substantial move.
- Shuka Minerals: Inverse Head and Shoulders Taking Shape: Shuka Minerals had a brief burst of interest in June, but the more important development now is the potential inverse head and shoulders pattern forming on the chart. The neckline is around 2.75p. A break and close above that level would point towards a move back to the 3.5p area, which was April resistance and the zone where the shares peaked last month.
- Shoe Zone: A Move Through the 200-Day Line: Shoe Zone produced a decent update and pushed through the 200-day moving average around 58p. The update may not have been spectacular, but the indication that consumers were buying shoes heavily during May and June has clearly helped sentiment. As long as the shares stay above the 200-day line, the immediate target is a retest of May resistance around 68p to 69p. That could happen by the end of the month, even if the shares fade again afterwards.
Key Chart Levels to Keep in Focus
The major themes remain fairly straightforward. The FTSE 100 and crude oil have bullish consolidation patterns that need upside breakouts for confirmation. The DAX and Bitcoin are weaker, with momentum readings pointing towards further downside risk. Gold remains capped below 4,050, while the Dow needs to escape its 52,000 to 53,300 range.
Among the smaller caps, the most constructive setups are those holding above recent breakout levels and rising moving averages. Itaconix, Hays, Robert Walters, Page and Shoe Zone all have clear technical levels to work from. Delta Gold and Guardian Metal require more caution, as their charts have suffered notable damage and need support to hold before any recovery case can be trusted.
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.
