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, Gold, Atome, Argo Blockchain, CAP-XX, Empyrean, Fusion Antibodies, Hamak, ImmuPharma, Kavango, Mkango, Ocado, Ondo, Smarter Web, Versarien.
Major Indices Outlook
FTSE 100
The FTSE 100 remains perched near the top of its current channel, holding steady around the 9045 level, which is now considered a normal resistance point. The expectation is for this index to push higher toward the steeper May rising trend channel, potentially reaching as high as 9220 by the end of next month.
On the downside, the key support to watch is around 8920, aligning with previous resistance levels from March and June (around 8910). This area also coincides with the floor of the channel, making it a critical level for the FTSE to hold. A drop below 8910 could see a retreat to the 50-day moving average near 8796, although no immediate signs suggest such a pullback unless unforeseen market shocks occur.
Notably, the Relative Strength Index (RSI) has rebounded from well above the neutral 50 mark, which is a positive sign of underlying momentum.
DAX
The German DAX index has shown resilience with multiple bounces above its 50-day moving average, a bullish indicator. The RSI has also bounced off the neutral 50 level three times this month, supporting the potential for an upward move.
Targets for the DAX include the 25,000 level by the end of this month, with a stretch target of 25,100, which represents the upper boundary of the current channel formed since spring last year. On the downside, the 50-day moving average remains the key support, with a worst-case scenario of a retracement to the old March resistance near 23,500 if a sharp pullback occurs.
Dow Jones
The Dow has been trading in a range between 44,000 and 45,000, following a “golden cross” event and RSI bouncing above neutral 50. The expectation is for the Dow to break through the 45,000 resistance and potentially reach the top of its channel from May last year, around 47,500 by the end of next month.
Resistance to watch is near 44,600, a line formed earlier this month. This pattern resembles a flag formation, often a precursor to a breakout move upward.
Cryptocurrency and Gold Analysis
Bitcoin
Bitcoin is currently consolidating above old resistance levels around $15,121, forming a nice flag pattern. It briefly overshot to $15,300 but remains within an accelerated rising trend channel that started in late March.
The upper target of this channel is around $14,400, with a longer-term black channel pushing toward $26,000. Support lies near the channel floor around $11,500, with additional support near the May peak of $11,200. A breakdown below these levels would be concerning, but the current consolidation suggests strength and a possible breakout attempt over the weekend.
Gold
Gold has been in a prolonged consolidation phase, not yet breaking decisively higher. It recently rebounded from below its 50-day moving average at 3,320, with the channel floor near 3,300 acting as solid support.
Resistance lies at 3,430, an April resistance line. Clearing this could open the path to 3,800 by the end of next month, although achieving this would require a significant catalyst given the current range-bound trading.
Selected Stocks: Technical Setups and Targets
Atome Energy
Atome Energy has bounced off its 200-day falling low, demonstrating strength by moving back above its rising 50-day moving average at 50p. The stock is targeting the top of a triangle pattern, potentially reaching 67p by next month. Key support remains at 48p, and maintaining this level would keep the bullish momentum intact.
Argo Blockchain
Despite some skepticism in the market, Argo Blockchain shows a strong recovery from an overshoot below a penny to 2.65p. The RSI has moved back above neutral 50, and the stock is trading above its 50-day moving average at 2.53p.
There is a gap to fill up to 2.88p, with resistance at the top of the falling trend channel at 3.2p. The best-case upside target is 4.5p, reminiscent of the company’s previous high valuations when Bitcoin prices were near $120,000.
CAP-XX
CAP-XX has made a nice recovery, surpassing the 0.20p level and aiming to retest last July’s resistance at 0.45p. While this retest may not happen before the end of next month, the stock looks poised to challenge the 0.30p area in the near term.
Empyrean
Empyrean had a strong day recently, exceeding expectations with a peak near 0.155p. Holding above the 200-day moving average at 0.11p is crucial, with a best-case target of 0.20p by the end of next month. Retaining most of the recent gains is a positive sign of sustained strength.
Fusion Antibodies
FAB broke out of a triangle pattern at 6.5p and could be heading toward the top of its range near 11p. Resistance around 7.5p is a key hurdle; a weekly close above this level would be encouraging.
The 50 and 200-day moving averages are both rising in parallel, akin to a golden cross, with the RSI bouncing near 60. This setup suggests potential for a move to 10p or higher after a long consolidation.
Hamak Gold
Hamak Gold is showing promising momentum within a rising trend channel established since March. The stock recently gapped up, helped by the arrival of a notable figure dubbed the “Laffer curve man,” boosting sentiment.
Support lies at the recent gap floor of 1.66p, with a target of 3p by the end of the month. The stock has already experienced a golden cross and RSI rebounds, indicating bullish momentum.
ImmuPharma
ImmuPharma is attempting to break through February resistance and the 50-day moving average at 2.5p. A successful breach could lead to a gap fill up to 3.3p by month-end.
Support is around 2.2p, with the RSI pushing above neutral 50 for the first time in months, signaling a potential turning point.
Kavango
Kavango’s outlook has improved from “half empty” to “half full,” with the stock aiming for 1.6p and one-year highs by the end of next month. Staying above the recent gap at 1p is critical for this bullish scenario.
Mkango
Mkango’s chart shows a classic V-shaped rebound, typically a mid-move consolidation. The best-case target is 45p by the end of next month, with a cautious approach advised until the stock closes above recent resistance at 36p.
Ocado
Ocado, despite not being a typical focus, has shown a strong turnaround. The shares have gapped up off lows and broken through the 200-day moving average at 294p with ease.
Maintaining levels above the 200-day line points toward a potential move to the top of its recent range near 353p, signaling renewed investor interest.
Ondo
Ondo has recovered above May support at 24p, with the RSI pushing above neutrality. Staying above the 50-day moving average and recent July resistance at 23p could see the stock revisit its best levels of the year, ideally moving toward 30p later this summer.
Smarter Web
Smarter Web continues to impress, breaking resistance near £2.80 and avoiding a drop to the 50-day moving average. The stock is currently testing resistance around £3.00, with a potential retest of £4.00 if Bitcoin moves to new highs.
Support at the 50-day moving average near £2.01 remains strong, with no recent dips below this level, highlighting the stock’s resilience.
Versarien
Once labeled a “zero,” Versarien is staging a beautiful U-shaped recovery. The stock is nearing a key end-of-day close above the 50-day moving average at 0.029p, with a best-case target of 0.053p by the end of next month.
Crucially, it must hold above recent neckline resistance at 0.019p to sustain momentum and potentially replicate last month’s rally during August.
Conclusion
This detailed technical survey reveals a market landscape filled with cautious optimism. Major indices like the FTSE 100, DAX, and Dow are positioned for potential upside moves, supported by strong RSI readings and key moving average bounces. Bitcoin and gold continue to consolidate, with clear levels to watch for breakouts or support.
Among individual stocks, several are showing promising technical setups, with targets set for significant gains in the coming weeks. Maintaining key support levels and observing breakout confirmations will be critical for traders looking to capitalize on these opportunities.
As always, market conditions remain dynamic, and staying informed with updated analysis will be essential for navigating the evolving trends.
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.
