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, Ascent, Delta Gold, Frontier, Marechale, Ocado, Priority, Pebble, WeCap.
Markets are in one of those awkward phases where plenty of instruments are sitting near key levels, but not many are offering clean, easy setups. That makes discipline more important than ever. A lot of the charts at the moment are drifting around moving averages, testing trend channels, or threatening to break down without fully committing.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: stuck around the 50-day average
The FTSE 100 remains frustrating. Price action is still swinging around the 50-day moving average, which is now slipping lower near 10,405. That is not the sort of behaviour that inspires confidence, especially when the market cannot hold above a key trend measure.
If the index finishes the day below that 50-day line, the door stays open for a move lower. The full bearish target would be the floor of the broader channel, near 10,100. That may feel distant for now, so a more immediate downside area to watch is around 10,250, where early June support comes in.
For the FTSE to break out of this sideways, rangebound mood, it really needs a daily close above the falling trend line from March, which comes in around 10,550. Until that happens, this still looks more like a market marking time than one beginning a decisive advance.
The RSI has also slipped under the neutral 50 mark, which weakens the picture further. In the short term, the minimum requirement for improvement is a close back above the 50 day moving average.
DAX: stronger than the FTSE
The DAX has been quieter, but the underlying tone is better. It is edging through resistance from last month around the 25,000 area, and ideally it now stays above that level.
If it does, the best case by the end of this month is a push towards 25,500. If the breakout loses momentum, the market may need another test of the 50 day line or slightly below, which has already happened recently.
The key support area below is the floor of the rising channel from March, sitting around 24,500. That looks like the main line in the sand on a worst case basis.
What stands out here is relative strength. The RSI is around 58, which is notably firmer than the FTSE and gives the DAX a more bullish bias. If the positive structure remains intact, the top of the March trend channel points to around 26,300 by the end of next month.
Dow: still constructive inside the channel
The Dow has reached the top of its channel from April. What may once have looked like a shorter term guide has become more significant, especially with the broader line stretching back to November.
The upside target remains around 53,400 by the end of next month, assuming the current trend can continue.
On the downside, the most likely support area is the lower end of the channel near 50,200. Like the DAX, the Dow has an RSI close to 58, so this chart still leans more positive than negative. It is not euphoric, but it is also not giving off heavy distribution signals.
Bitcoin: still dithering, but in an important spot
Bitcoin is doing more than hesitating. It briefly pushed through 64,000 and also moved into the overlapping support and resistance zone around 65,000 to 66,000 from March, but failed to hold the break. That leaves the move looking like a bull trap.
The next important question is whether Bitcoin can put in a higher low above 60,000. If it can, that would help build a more credible support base and keep the broader structure from deteriorating.
If recent support around 60,400 gives way, the market could start sliding down the falling trend channel. Staying below the recent 67,000 resistance keeps that risk alive, and that channel currently implies a possible move towards 48,000 by the end of next month.
So at this stage, the levels are fairly clear:
- Bullish stabilisation: hold above 60,000 and form a higher low.
- Bearish continuation: lose 60,400 and remain capped under 67,000.
Ethereum: breakdown warning has played out
Ethereum had a tussle around the old February low at 1,753. It briefly reclaimed that area and rallied towards 1,850, but the move did not last. That failed recovery now looks like another bull trap style move.
With price now back below 1,753, the focus shifts lower. Initial support looks more likely around 1,620, and a retest of the 1,500 area cannot be ruled out while the market remains under the old breakdown level.
The RSI had already warned of trouble by slipping under 50, and that signal has proved reliable. For now, Ethereum remains technically vulnerable.
Gold: weak below the 200 day moving average
Gold had seemed to be settling down, but that stabilisation has not lasted. The market has now failed below the 200 day moving average, and recent resistance around 4,464 has left the chart looking heavy.
Below 4,380, the risk of a deeper move lower increases. A drop towards 4,000 is now very much on the radar, and there is a growing chance that level may be briefly undercut as stops get taken out. The market avoided that scenario recently when it held at 4,023, but the chart still looks vulnerable to a move into the high 3,800s or 3,900 area.
The RSI falling under 50 adds to the poor tone. At the moment, gold has a distinctly negative technical profile.
WTI crude oil: pressure remains while under 80 dollars
Crude oil has come under pressure and moved down towards the 200 day moving average, which was tested around 73.79. That had been the first obvious downside target after the break below 80 dollars.
The next notable support is lower, around 68 dollars, which matches the floor of the late February gap.
As long as oil stays below former April support near 80 dollars, the risk remains tilted toward that 68 dollar area. In simple terms, the bullish case has gone stale for now.
Small-Cap Review
Ascent Resources: trying to build on the double bounce: Among the smaller shares, Ascent Resources has been one of the more interesting setups. It has already built on a double bounce from 0.32 pence, and the next technical hurdle is recent resistance around 0.55 pence. A break through that area would open the way to around 0.70 pence, potentially by the end of the month. There is also the backdrop of potentially significant company news in the coming weeks, which may add to the interest. From a charting perspective though, the key remains simple: clear resistance, and the shares can aim higher.
Delta Gold: looking for support after the pullback: Delta Gold has had a rough spell, but the chart still shows a rising trend channel from February. There was a sharp pullback after price reached the top of that channel near 210p, which effectively satisfied the previous charting objective. The next task is to see whether support comes in near the floor of the channel around 137p. There may even be a brief dip towards the 50 day moving average near 135p before any recovery attempt begins.
If caution is the priority, the better approach is to wait for a daily close back above 155p, which would suggest momentum is returning. Without that, there is still some risk of another push down, perhaps just under 130p. For now, the preferred idea is a bounce developing from around the 50 day line over the coming days. The RSI is still below 50 v 46, so the more conservative stance is to wait for that momentum gauge to improve as well.
Frontier IP Group: interesting only if resistance breaks: Frontier is back near its February and March support zone around 12 pence. That gives it some chart support, but it is not exactly one of the more energetic setups around. The first thing needed here is a daily close above 13 pence. That would nudge the price back above the lower end of the gap area and could open an initial move towards 17 pence. There was a resistance break in April that triggered a decent rally, so the share has shown it can move. It just needs fresh confirmation.
Marechale Capital: one of the stronger performers: Marechale Capital continues to look like one of the better charts in the recent crop. The current pattern resembles a mid move consolidation, which often appears before another leg higher. The shares have bounced above an old target near 6.60 pence, and above that the next target is 10 pence. Given the recent pace, that could even be reached by the end of this month. Ideally, the shares would close above recent resistance at 7.40 pence to keep the momentum cleanly on the upside.
Ocado: a classic falling knife unless support holds: Ocado is the sort of share that tempts bottom fishers, but it is still a risky proposition. The logic for interest is easy enough to see. The price has returned to a support zone around 170 pence, so buyers are trying to step in near the lows. If the shares can stay above the rising support line near 180p, there is room for a rebound towards the 50 day moving average at 198p. That would still only amount to a relief move unless the broader picture improves.
The problem is that both the 50 day and 200 day moving averages are still falling, which is not an attractive setup for trend followers. Anyone not keen on trying to catch a bottom would probably want clearer confirmation, such as the RSI moving back above 50.
Priority: support is showing, but this is still speculative: Priority is another high risk chart. The shares dropped towards 0.83 pence but then bounced fairly well, hinting that there is some support in the market. If the price can hold above 1.10 pence, there is potential for a move up to the 50 day line near 1.60 pence. For a cleaner buying trigger, a daily close above recent resistance at 1.30 pence would help. Even then, this is very much a speculative setup rather than a comfortable hold.
Pebble Group: constructive trend channel still intact: Pebble Group remains one of the steadier charts. The shares are progressing within a rising trend channel that stretches back to this time last year. The top of that channel points towards 73 pence, and the bullish view stays in place while price holds above the 50 day moving average around 56 pence. The technical case is helped by the upside gap from April, which has not been filled, and by the fact that support has emerged above a rising 50 day line. That combination often appears ahead of a larger or at least more meaningful move higher.
WeCap: a small sign of life after a painful run: WeCap has been a difficult chart for a long time, and most setups in this name have failed badly. That said, there is at least a faintly more encouraging pattern beginning to form. The shares have managed to break back above 0.3 pence, and the initial upside objective is 0.43 pence, which is where the 50 day moving average sits.
No one should get too ambitious too quickly here, but there are a couple of positives:
- RSI has moved back above 50, which is an early momentum improvement.
- The latest session opened at the low and closed at the high, suggesting some accumulation interest at depressed levels.
That does not guarantee a turnaround, but it is at least a better look than many of the failed signals seen previously.
Overall market message
The broad takeaway is that the stronger major indices, especially the DAX and Dow, still look more constructive than the FTSE. In crypto, both Bitcoin and Ethereum remain vulnerable unless they can reclaim and hold important support levels. Gold looks weak, crude is under pressure below 80 dollars, and stock specific setups are very much a mixed bag.
Where the charts do offer opportunities, they tend to depend on very clear trigger levels. That is usually a sign of a market where patience pays. Chasing half formed moves in this kind of environment is rarely the best strategy.
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.
