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, CleanTech Lithium, Greatland, Huddled, Mkango, Nativo, Orosur, Phoenix Copper, Quadrise, Talisman.
It has been a tricky week across the major markets, with plenty of charts sitting at important technical inflection points. The big theme is simple enough: key moving averages and channel floors are doing a lot of the work. Hold above them and there is scope for a recovery. Break below them and the more cautious targets come into play.
Here is the charting picture for the FTSE 100, DAX, Dow, Bitcoin, Ethereum, gold, crude oil and a selection of UK-listed growth shares.
As always, do your own research and treat these as chart-based observations rather than hard recommendationsend-of-day
FTSE 100: Holding the 50-Day Line Is the Immediate Test
The FTSE 100 has failed below the July resistance line at 10,850, but it has at least managed to bounce from the floor of its rising channel around 10,600. That is the first positive sign.
The key level now is the rising 50-day moving average at 10,751. If the index can remain above that level, there is a reasonable chance of another attempt on 10,850 early next week.
A breakout through July resistance would open the way towards fresh record highs and the top of the March rising channel near 11,100. Given the run-up to the Budget and the wider list of market negatives, that may feel a little ambitious. But technically, that remains the upside route.
On the downside, a failure to hold the 50-day line would put 10,400 in focus. That area combines the 200-day moving average with July support, making it the more realistic bearish target.
DAX: Still Stuck Below Resistance
The DAX has run into resistance at its 50-day moving average, which is exactly what that average is supposed to provide when the market is weak. An end-of-week close above 25,771 is needed to improve the picture and put the 26,000 zone back in play.
At present, the downside levels look more relevant:
- 25,100: the floor of the recent gap.
- 24,800: the approximate level of the 200-day moving average.
- July support: the broader support area if the pressure persists.
While the DAX remains below its 50-day line, further probes towards the 200-day line and July support are favoured. The RSI has also failed twice around the neutral 50 area, which is a mildly negative signal. For context, the relative strength index is commonly used to assess whether momentum is improving or deteriorating.
Dow Jones: A Channel-Floor Bounce, but Not a Bullish Mood Yet
The Dow has tested the floor of its rising trend channel around 51,100. The channel has turned out to be wider than expected, but that low has held so far.
As long as the Dow remains above 51,100, the near-term objective is a retest of the 50-day line and former August support near 52,700.
The RSI is in the upper 30s, which is hardly a signal that the bulls are back in charge. This remains more of a sell-into-strength market than one to chase on the upside.
Bitcoin: Range Trading Between $75,000 and $82,000
Bitcoin remains locked in a familiar range between $75,000 and $82,000. The bullish scenario depends on an upside break from that band.
If Bitcoin can clear the range ceiling, the best-case target for the end of next month is around $94,000. That corresponds with the top of the February price channel and the upper boundary of the triangle formation.
The upside view remains valid while Bitcoin stays above the rising 50-day moving average at $72,400. There has also been a rebound from RSI 50, which suggests that the $75,000 range base should continue to hold.
There may still be intraday moves towards the 50-day line. Beneath that sits the 200-day line near $70,000, which is the next major support reference.
Ethereum: A Positive Bounce From the Bottom of the Range
Ethereum is also a range market, broadly trading between $2,350 and $2,580. The encouraging development is the bounce from the floor of that range.
A sustained move above $2,580 would point towards the top of the February rising channel at $2,900. The RSI has bounced from the neutral 50 region and sits around 57, which leaves it in a decent position for further gains.
The rising 50-day moving average is near $2,239. Any intraday weakness towards that area would be regarded as a buying opportunity from a charting perspective.
Gold: Recovering Above a Rising 50-Day Average
Gold has had a difficult week amid the interest-rate backdrop, but the market appears to have absorbed the news. The price has bounced from the floor of its rising trend channel and from just below the 50-day moving average at 4,288.
That combination is constructive. A bounce from a rising 50-day average is generally more encouraging than one from a flat or falling average.
With the price back above that level and RSI moving above the neutral 50 mark, the next target is the 200-day moving average around 4,541 by the end of next month.
WTI Crude Oil: Support Lies Around $97 to $98
WTI crude has been a little weaker than expected after reaching as high as $107. The market is now drifting back towards the psychologically important $100 level.
The preferred support zone is $97 to $98, which marks old June resistance. If that does not hold, $93 is the next level to consider, corresponding with prior July support.
A move significantly below $93 is not the base case unless the geopolitical backdrop changes materially, particularly around the prospect of conflict involving Iran.
Small-Cap Share Charts to Watch
- Avacta: Regrouping Above Former July Resistance: Avacta delivered a sharp move into the low-80p area after trading in the low-70p range, reaching its expected target much more quickly than anticipated. The notable feature since then has been the equally rapid retreat from the Wednesday peak. For now, the shares appear to be regrouping around former July resistance near 74p. Staying above that level would support a retest of the recent 87.5p high, with the broader target still at 100p by the end of next month. Both the 50-day and 200-day moving averages are rising. That is effectively a golden-cross style setup and remains a positive technical backdrop.
- CleanTech Lithium: Rising 50-Day Support Is the Important Signal: CleanTech Lithium had a well-received investor lunch, which added to the positive tone around the shares. The more important chart signal, though, is the recovery above a rising 50-day moving average. That type of support is one of the stronger technical signals, particularly when it begins to drive a substantial move. The initial target is 7.44p at the 200-day moving average, ideally before the end of the month. There is plenty for the market to look forward to, including the CEO search process and the run-up to a proposed ASX listing by year end. But technically, the rising 50-day line is the main feature to respect.
- Critical Metals: A Strong Month and a Golden-Cross Setup: Critical Metals has enjoyed a vertical move during the month and is approaching its second target at 24p. The preference is for that level to be reached next week, provided the shares remain above the former January support at 18p. The 50-day and 200-day moving averages are both rising into a golden-cross configuration. This is often the strongest phase of a share-price cycle, and it has certainly looked that way here.
- Greatland Resources: Gold Price Support Helps the Chart: Alongside the improving gold price, Greatland Resources looks to have found a floor around £5.50, at the base of its rising trend channel. While the shares hold above £5.50, the next target is the 200-day moving average at £6.31. That may be achievable by the end of next month, and potentially sooner. For the more cautious approach, an end-of-day close above the 50-day moving average at £6.00 would provide further confirmation.
- Huddled: Aiming for the Top of the Gap: Huddled is generating excitement around its 20-minute video, and the immediate question is whether that can help revive the share price. From the charting angle, the shares are bouncing above a rising 50-day moving average, which is encouraging. The target remains the top of the gap around 0.72p, provided the latest support near 0.50p continues to hold.
- Mkango Resources: A Channel-Floor Bounce With Room to 60p: Mkango has bounced from the floor of its longer-term channel, based on an uptrend line that has been in place since around this time last year. As long as the shares remain above the 50-day moving average at 40p, the initial target is the October resistance line near 48p. The best-case outcome is a move towards 60p by the end of next month. The RSI has bounced from 50, while the price has also rebounded from a rising 50-day average. That is a much better setup than merely holding a flat moving average.
- Nativo: Funding Clarity and a Break Above 0.27p: Nativo appears to have its funding position sorted, with funds expected to be received by year end. The shares have gapped up from the lows and pushed above former declining resistance at 0.27p. Above that level, the target is the top of the rising trend channel around 0.50p by the end of next month. Ideally, the shares close above the 200-day moving average near 0.33p to reinforce the breakout.
- Phoenix Copper: Early Signs of a Turnaround: Phoenix Copper has been through a difficult period, but the chart suggests a tentative recovery is underway. The shares are rising without specific news and finding support around 0.50p, which had previously acted as resistance on the way down. Holding above 0.50p would point towards recent resistance around 0.70p or higher by the end of next month. The particularly interesting development is the 50-day moving average beginning to rise. That is a meaningful improvement for anyone looking for a genuine turnaround in the chart.
- Predator Oil & Gas: Approaching a Rare Golden Cross; Fundraising remains the obvious risk factor for Predator, despite the company stating that it does not need to raise funds. From a technical perspective, however, the chart is looking considerably better. Both the 50-day and 200-day moving averages are rising, with the 50-day line near 3.1p. Above that level, the target is the top of the range and channel around 3.85p by the end of next month. The shares are moving towards a golden cross, a setup that does not come along every day for Predator and one that gives the chart a stronger look than it has had for some time.
- Quadrise: Recovering From the Lows: Quadrise is another stock that looks to be coming back from the lows. The 50-day moving average is rising, and the shares have held above it, suggesting that a more meaningful recovery could be under way. The target is 1.54p at the top of the rising trend channel, with a move by the end of the month preferred if the current momentum continues.
- Talisman: Above 6.8p, the Chart Points Towards 10p: Talisman showed early promise at the beginning of the year and remains within a rising trend channel, although the channel now appears flatter than before. The floor of the channel is around 6.22p. More importantly, the shares need to stay above the 50-day and 200-day moving averages around 6.8p. Above 6.8p, the technical target is the top of the channel near 10p by the end of next month.
The Main Technical Levels to Respect
Across these charts, the recurring message is that the market is reacting to the same technical tools: channel floors, former support and resistance, RSI 50 and the 50-day and 200-day moving averages.
A rising 50-day line repeatedly stands out as a constructive feature, especially where prices have bounced above it. Where the 50-day and 200-day averages are rising together, or moving towards a golden cross, the prospect of a sustained recovery improves.
That does not remove risk, of course. Key support levels must hold. But for the time being, the better setups are those that have reclaimed support, are showing RSI recovery, and are building above rising moving averages.
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.
