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, Atlas, Aminex, Critical Metals, Ethernity, East Star, Halo, Huddled, IG Group, Sovereign Metals, Smarter Web, Seraphim, Tooru.
Equity indices are doing the hard work around their 200-day moving averages, while Bitcoin and Ethereum look more comfortable. That contrast is the main feature of the latest charts: shares have been testing support, but crypto has been finding buyers around former resistance.
Among individual stocks, the picture is mixed. Some charts show encouraging combinations of rising moving averages, higher gaps, and golden crosses. Other times, an apparently solid base has disappeared altogether. The important distinction is between a chart offering a defined recovery setup and one that is still a falling knife.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Equity Indices: The 200-Day Moving Average Comes Into Focus
FTSE 100: A Close Above 10,455 Would Help
The FTSE 100 finally did what it had been trying to avoid earlier in the week: it lost its support line and returned to the 200-day moving average. Once the rising channel broke, that was always a likely destination.
The 200-day line is around 10,455. Ideally, the index needs a weekly close back above it. Even an end-of-day recovery above that level would improve the immediate picture and offer scope for a rebound towards 10,600, the support area before the breakdown.
There were earlier tests towards the 200-day average in March and June. This latest return suggests a slightly weaker market, which is worth keeping in mind rather than assuming another automatic recovery.
On the more encouraging side, the RSI has bounced from near oversold territory, and the current area also ties in with July support. That makes this a plausible rebound zone, provided the market can reclaim the moving average.
DAX: Recovery Scope, but Momentum Still Needs Work
The DAX has followed a similar route: a channel break followed by a move towards its 200-day line. The area around 24,800, just above that average, has effectively been tested.
Holding above the 200-day line would leave room for a recovery towards the top of the range at 25,700. Anything beyond that looks rather ambitious for now.
If support gives way, the next downside reference is the June support zone around 24,600. There is a reasonable argument that the worst of the immediate sell-off may be over, but persistent RSI failures below 50 remain a concern. Price support is useful; stronger momentum would make it more convincing.
Dow: 50,250 Is the Obvious Support Reference
The Dow is catching up with the weakness in the FTSE and DAX, although it has not yet reached its own 200-day moving average. That sits around 50,250 and also coincides with the June support area.
That combination makes 50,250 the initial and obvious level to monitor. A decent bounce from there could suggest that the pullback running since August is approaching its end.
The warning was already present in momentum. Three failures below RSI 50 left the market vulnerable to a breakdown this week. It was a fairly open invitation to the bears, and the next question is whether the longer-term average can provide a useful response.
Bitcoin and Ethereum: Former Resistance Is Becoming Support
Bitcoin: The $95,000 Channel Target Remains in Play
Bitcoin has not joined the equity sell-off. Instead, it spent several sessions finding support at or above old resistance and has now bounced again. That is an encouraging sequence: the breakout area is attracting buyers rather than immediately failing.
The latest move of roughly 3% improves the prospect of reaching the top of the rising price channel drawn from February, around $95,000 by the end of October.
The downside dividing line is $82,000. A break below that would bring the 50-day moving average, around $77,700, into focus as a possible support zone. For now, the latest bounce makes that weaker scenario look less likely.
Ethereum: $3,000 First, Then a Possible $3,400
Ethereum was already looking firm because support had formed comfortably above the old resistance area around $2,580. The latest action reinforces that position.
Above $2,580, the first objective is the top of the rising February trend channel at $3,000. The best-case extension would be towards the post-January resistance area around $3,400 by the end of October.
If there is a sudden reversal, the favoured downside destination is the 50-day moving average around $2,460. For anyone considering a limit-order approach, that is the pullback area of interest, rather than assuming the current strength must continue uninterrupted.
Gold and WTI Crude Oil: Recovery Versus Further Retracement
Gold: A Revised Channel Offers a More Constructive Interpretation
Gold has been a tough market. It fell out of a rising channel that looked rather steep, but a less aggressive channel drawn from June may fit the overall price pattern better.
Under that more optimistic interpretation, holding above $4,100 leaves room for a recovery towards the 50-day moving average around $4,320 by the end of October.
The danger is a break of the roughly $4,100 to $4,120 support zone. That would raise the prospect of another test below $4,000, hopefully the final one rather than the start of a fresh leg lower.
The constructive case therefore rests on support holding. Redrawing the channel offers a possible framework, but it does not remove the need for price to confirm it.
WTI Crude Oil: Repeated Failures Below the Gap
Crude oil has been struggling on the chart, even if it hardly feels that way to motorists. There have been repeated failures below the gap area, including another pair in the latest sessions.
Despite the pullback, the price has not yet touched its 50-day moving average around $86.40. A test of that level looks plausible. While the market remains below the gap, the weaker scenario extends towards the 200-day moving average around $82.
The better outcome would be to find support at the 50-day line and stay above it. However, the RSI has failed at 50, which points towards a move to the bottom of the falling channel drawn from June. At present, the momentum evidence favours further retracement rather than an immediate recovery.
Smaller-Cap Shares to Watch
- Atlas Metals: A Rising 50-Day Line Offers Some Relief: Atlas Metals has been a painful up-and-down situation. The more interesting feature now is that the shares are bouncing above a rising 50-day moving average. That opens the possibility of a move towards the top of the channel at 9p over the next week or two. It would be a substantial recovery, and simply reaching that area would suggest that the worst may be over. For a more ambitious outcome, the old May resistance at 10p is the next reference. The constructive October scenario is therefore a move towards 9p, with 10p representing the greater-glory version.
- Aminex: Almost Everything a Recovery Chart Could Want: Aminex surprised the market with a sharp decline followed by an equally sharp recovery. After the August bear-trap reversal, the shares gapped through the 50-day moving average and are now holding around a rising 200-day line. The company’s rather ropey trading history may make one cautious, but the chart itself points towards a potential golden cross and a best-case target of 3.4p by the end of October. Main support reference: the rising 200-day average around 2p. Stop-loss reference: the 50-day average around 1.67p.
- Critical Metals: Another Bull Flag and a Golden Cross: Critical Metals has already done rather well, but the chart deserves another look. A second bull flag has provided a mid-move consolidation breakout, and the next trigger is a move through 26p. Above that level, the best-case objective is 40p by the end of November. Ideally, the shares should remain above previously broken resistance at 22p. The additional positive is the golden cross between the 50-day and 200-day moving averages, which formed in the previous session. That adds to the momentum case, although the breakout through 26p remains the immediate price test.
- Ethernity: A Spectacular Move, with Breakout Support Now Important: Ethernity has been one of the more spectacular moves in this collection. The earlier upside objectives 0.0020p and 0.0023p and the 200-day moving-average hurdle have been passed, leaving the higher channel target of 0.0062p in play. The pace of the advance suggests that the best-case objective could be reached by the end of October, or even by the end of the following week if momentum continues at the same rate.
- East Star: Resetting the Channel After Earlier Targets: East Star has already reached several targets, so the task now is to adjust the price channel to reflect the progress made. The revised support reference is 8.6p. Above that, the next objective is 13p by the end of November, allowing a little time for the current rate of progress to continue.
- Halo: A Floor at 7.2p: Halo has had to reassure the market that everything is all right. On the chart, the useful feature is the floor around 7.2p. Above that level, the recovery objective is the 9p area by the end of November. That was resistance on the way down and is also approximately where the 50-day moving average sits, making it a natural rebound target.
- Huddled: A Familiar Setup, Still Waiting for the Big Move: Huddled is rising above a rising 50-day moving average after coming off its lows. That is normally the sort of setup capable of producing a sizeable move higher, although the larger move has not yet arrived. The best-case objective is 1.25p by the end of November, with an intermediate target on the way. The positive scenario remains valid while the shares hold above the 50-day moving average around 0.45p. It is an interesting setup, but the distinction matters: the ingredients are present, while the stronger price response is still to come.
- IG Group: A Falling Knife Until Support Is Reclaimed: IG Group has delivered a real kick to the bulls. For a couple of months, the shares appeared to be building a base around the post-December support area near £13. That interpretation has now been blown out of the water. The remaining bullish argument is that the latest decline represents an overshoot and that prices below £10 could eventually prove attractive. But that is a falling-knife proposition, not a confirmed recovery setup. The cleaner technical reference is previous support around £10.20. An end-of-day close back above it would at least provide a momentum trigger. Without that recovery, a move below £10 remains a case of trying to anticipate the bottom.
- Sovereign Metals: Waiting for the Accumulation Range to Resolve: Despite a non-executive director stepping down, Sovereign Metals remains within what may be an accumulation zone between its support and upper trend lines. The lower support line is around 25p, while the 50-day moving average is near 27.25p. A break of the upper boundary would open the way towards 33p by the end of November. There are two distinct approaches on the chart: Wait for an end-of-day close above 27.5p to confirm the breakout. Look for support on dips towards 25p within the existing range.
- Smarter Web: The 86p Objective Is Getting Closer: Smarter Web seems to attract surprisingly little noise given the progress on its chart. The key earlier signal was the break of the resistance line at 36p, which opened the route first to 49p and then 74p. The best-case objective has been 86p, and the shares are now not far away. A move there over the following week remains the constructive scenario while the price stays above the old 74p target. Continued strength in Bitcoin and the wider crypto market would be a helpful backdrop to that outlook.
- Seraphim: A Strong Arc Above Rising Moving Averages: Seraphim has a personal connection for me: it was one of my father’s last trades, made well below £1, and it has continued to do well since. Technically, the shares have formed a rather attractive arc above rising 50-day and 200-day moving averages. The immediate objective is the top of the rising trend channel drawn from December, around 230p. The RSI rebound adds support, and the overall shape also resembles an inverted head-and-shoulders formation. On that reading, 230p may be a minimum objective, with scope ultimately to revisit the year’s best levels. The upside interpretation remains valid while the shares hold above the 50-day moving average around 182p.
- Tooru: A Gap off the Lows Following a Decent Update: Tooru has delivered a decent update, with the rollout continuing. The chart response includes a gap off the lows and an attempt to gap through the rising 50-day moving average. The immediate objective is the top of the falling trend channel at 0.21p by the end of October. Given the update and the improving chart position, that looks like the least the market could offer if the recovery takes hold.
The Main Distinction: Support Holding or Support Failing
The strongest charts in this rundown are not simply those that have risen the most. They are the ones holding former resistance as support, trading above rising moving averages or consolidating before another breakout.
Bitcoin and Ethereum are showing that constructive behaviour. Aminex and Critical Metals have several positive technical features working together. Elsewhere, the equity indices still need to demonstrate that their longer-term support can hold, while IG Group needs to reclaim a broken level before its recovery case becomes more than bottom-fishing.
The targets are conditional scenarios, not promises. A close above resistance can provide a useful trigger; a loss of the support underpinning the setup changes the picture. That is the distinction worth keeping at the centre of each chart.
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.
