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, Empire Metals, GCM Resources, Hamak, Harena, Invinity, Mkango, Nativo, Powerhouse Energy, Thruvision, Tasty.
Global Market Indices: Footsie, DAX, and Dow Analysis
FTSE 100 (Footsie)
The FTSE 100 has responded notably to the ongoing tariff tensions, hovering near the upper boundary of its rising channel around the 9,060 level. The immediate support is the red upward trend channel dating back to May 1940. Zak highlights the importance of maintaining above this support to avoid further downside risk, with 8,910 being the next critical level linked to June resistance.
On the upside, there’s optimism that the FTSE could climb to around 9,280 by the end of August if it sustains above 9,040, marking a best-case scenario within the current price channel. However, recent price action suggests a cautious approach as the market may be trending downward in the short term.
DAX
The DAX has been particularly affected by tariff uncertainties, with resistance firmly established near 24,500, a level it has struggled to break for nearly two months. The 50-day moving average offered support for a while, but the index has since fallen back toward March’s resistance at 23,500, which now acts as a key near-term support.
Zak points out that the Relative Strength Index (RSI) has dipped below the neutral 50 mark to 43, signaling potential weakness. Staying above 23,500 is crucial, and a close back above the 50-day line near 24,000 would indicate this is merely a minor markdown rather than a significant downturn.
Dow Jones Industrial Average
The Dow has been trading in the 44,000 to 45,000 range, with the July floor at 43,700 serving as a critical support zone. Futures markets suggest this level may be tested further. The 50-day moving average at 43,400 also stands as a focal point for potential support.
Despite the RSI slipping just below 50 to 49, both the 50- and 200-day moving averages are rising, which maintains a relatively healthy technical picture. However, the Dow has repeatedly failed to break above 45,000 since late November, indicating resistance pressure at that level.
Cryptocurrency Market: Bitcoin and Ethereum Trends
Bitcoin
Bitcoin’s recent mini range between 115,000 and 120,000 appears to be breaking down, with prices testing the May peak around 112,000 and the 50-day moving average just below that level. Zak notes this is not yet alarming as the downward move was anticipated, especially considering the steepness of the April rising trend channel.
The RSI has fallen below the neutral 50, reinforcing the cautious outlook. A decisive end-of-day close above 120,000 to 121,000 would be necessary to regain upward momentum and possibly challenge the upper limits of the channel, which currently seems quite steep.
Ethereum
Ethereum had shown promise of breaking above the 4,000 mark but now appears to be delayed. The top of the old channel near 3,580 serves as the main support for now. There remains potential for Ethereum to reach the upper parallel of its rising trend channel from March, possibly as high as 4,400, but this move may take a few more days to materialize.
Gold Market Outlook
Gold is currently in a neutral position, neither strongly bullish nor bearish. Zak emphasizes the importance of a clear end-of-day close above the 50-day line at 3,342 to signal renewed strength. Without this, there is still a risk that the metal could retest June’s support around 3,220.
Selected Stocks: Momentum and Key Levels
Empire Metals
Empire Metals has resumed its recent bull run, finding solid support around 24 pence, where it held earlier in July. The next target is a retest of last month’s highs near 33 pence.
GCM Resources
Previously showing strong potential, GCM had to retest resistance near 5.3 pence from March. Despite a slight dip below this, staying above 5 pence keeps the outlook positive with hopes to reach April 2024 resistance around 10 pence by the end of next month.
Hamak
Hamak is trading within a wide rising trend channel and may have hit the near-term top. However, maintaining above the July peak of around 6.45 pence could spur a fresh leg higher. The best-case scenario points to a rise towards 10 or 11 pence within the channel.
Harena Resources
After a placing of £1.2 million, Harena’s shares bounced back and remain above the 50-day line at 0.25 pence. The company is benefiting from the current rare earths bull market, with a potential target near 0.31 pence by month-end.
Invinity Energy Systems
Following positive announcements, including a managed order and planning application, Infinity gapped up above its rising 50-day line. The stock is eyeing the top of a broadening triangle pattern from July last year, with a target around 32-33 pence anticipated by the end of next month.
Mkango Resources
Mkango continues to rerate positively amid strong momentum. Remaining above the 35 pence floor of its rising trend channel supports a potential move up to 45 pence.
Nativo Resources
Nativo delivered a spectacular gap higher and has held the top of that gap at 0.33 pence. Staying above this level suggests a target near 0.38 pence by the end of next month. A weekly close above the 50-day line at 0.37 pence would further confirm bullish momentum.
Powerhouse Energy
Powerhouse Energy’s recent strong move opened at the lows and closed at the highs, nearly reaching the initial target of 0.65 pence. The stock closed with a gap-close buy signal and remains above the March gap top at 0.60 pence, aiming for a move up to 0.80 pence soon. The rising 50-day moving average near current lows adds to the positive outlook.
Thruvision Group
Thruvision shows steady stake building and remains above recent resistance at 1.4 pence. The top of the recent post-March range near 2.5 pence remains the target to watch.
Tasty
Tasty’s chart looks intriguing, especially following confirmation of talks involving former Fulham Shore CEO David Page, a respected figure. The stock remains above the 200-day line at 0.74 pence, aiming for a rise to 1.6 or 1.7 pence by the end of August.
Conclusion
Zak Mir’s latest market analysis highlights a cautious yet hopeful atmosphere across global indices, cryptocurrencies, and select stocks. Key support levels and moving averages play critical roles in determining the next moves, while tariff concerns and technical resistance points temper optimism in some areas.
For traders and investors, maintaining awareness of these pivotal levels—such as 9,040 for the FTSE 100, 23,500 for the DAX, and 112,000 for Bitcoin—will be essential in navigating the weeks ahead. Meanwhile, promising opportunities remain in select stocks like Empire Metals, Mkango, and Powerhouse Energy that continue to show bullish momentum.
Stay tuned for ongoing updates and continue to monitor these charts closely as market dynamics evolve.
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.
