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, African Pioneer, Central Asia, European Green Transition, Georgina, Light Science, Ondo, Orcadian, Reach, Rentokil, Sealand, Sainsbury, Xtract.
The major indices are generally holding up well, even if the technical picture remains a little uneven in places. There are some clear upside targets across the FTSE 100, DAX and Dow, while Bitcoin, gold and crude oil require more caution. In the small-cap arena, several charts are beginning to show the sort of setups that can produce strong moves into next month.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Note* The annoncment “Georgina Energy PLC has raised £1.5 million through the issue of 16,666,666 new ordinary shares at 9 pence per share, with investors receiving one warrant per share.” was released after inclusion of GEX into days publication.
FTSE 100: 11,100 Is the Key Breakout Level
The FTSE 100 has come close to doing what was expected for the end of next month already. It has moved within touching distance of 11,000, with the high only around 12 points away.
The more important level is 11,100, which marks the top of the rising channel in place since March. As long as the index remains above recent support around 10,880, the bias remains firmly towards a substantial upside push.
The old February peak near 10,900 is also acting as support, which is exactly what should happen after a prior resistance level has been surpassed.
- Support: 10,880, then 10,900
- Breakout level: 11,100 on an end-of-day closing basis
- Potential target: 11,500 by the end of next month
A convincing close through 11,100 would open the way to that 11,500 area. The structure remains positive while the index holds above the recent breakout support.
DAX: Channel Target Remains 26,300
The DAX has behaved rather well. The expectation was for a bounce from the floor of the channel running from March, and that is exactly what happened.
There was a bear trap and a reversal higher after the early-month gap down. Following some typical market jiggery-pokery at the start of the week, the index then gapped higher again.
The top of the channel sits at 26,300, and that remains the key target for the end of next month.
- Support: 25,300, the top of the latest gap
- Upside target: 26,300
As long as the DAX stays above 25,300, the chart remains set up for a test of the upper channel boundary.
Dow Jones: Rising 50-Day Average Supports a Move to 54,000
The Dow has bounced from the floor of its rising trend channel from April. More importantly, it found support just above the rising 50-day moving average at 51,643.
The RSI is not particularly helpful here. It is rather messy and does not offer a clean momentum signal. What matters more is the market’s interaction with the rising 50-day line, which has provided the springboard for the latest recovery.
- 50-day moving average: 51,643
- Resistance to clear: 52,700
- Target: 54,000 by the end of next month
A break through 52,700 would support the move towards 54,000. That target also aligns with the projected November resistance line, giving it added technical significance.
Bitcoin: Still Holding Above the 50-Day Line, but Momentum Is Weakening
Bitcoin is struggling, although it is struggling in a relatively respectable position. The price remains above the rising 50-day moving average around 63,400.
While Bitcoin stays above that level, there is still a possibility of a move to the resistance line from October at 68,000. The best-case scenario would be a push towards the 200-day moving average at 71,400.
There is, however, a warning signal in the RSI window. The RSI has broken its uptrend line, which shifts the balance towards a near-term retracement before any renewed rally.
- Near-term support: 63,400
- Main support: 61,000
- Resistance: 68,000
- Best-case target: 71,400 at the 200-day average
If the 50-day line gives way, 61,000 becomes the obvious area to watch. Bitcoin could still recover afterwards, but the RSI setup suggests that support may need to be tested first.
Ethereum: A Chance to Finally Reclaim the 200-Day Average
Ethereum is still fighting for its place among the major markets, but the technical picture has improved. The price is holding above the rising 50-day moving average at 1,773 and above old mid-June resistance near 1,850.
As long as Ethereum remains above 1,850, the target is the 200-day moving average at 2,110 by the end of next month.
- 50-day moving average: 1,773
- Key support: 1,850
- Target: 2,110
The 2,110 level matters because Ethereum has not traded above its 200-day average since November. Even a temporary move through that line would represent a meaningful technical change.
Gold: Repeated RSI Failures Leave the Downside Vulnerable
Gold remains caught in a broad range, with geopolitics continuing to influence sentiment. The practical range is roughly 4,000 to 4,170, with the 50-day moving average at 4,184 helping to define resistance alongside the declining resistance line from January.
The RSI has faded again from the neutral 50 level. That has happened repeatedly since the middle of May, and the more often a market fails at the same momentum point, the more likely it becomes that a new leg lower will eventually develop.
- Range resistance: 4,160 to 4,170
- 50-day moving average: 4,184
- Initial support: 3,880 to 3,900
- Possible deeper downside: around 3,500
Gold needs to break the sequence of RSI failures before it can regain a more convincing bullish tone. Until then, the market remains vulnerable to a move below the 3,900 area.
WTI Crude Oil: A Ceasefire Headline Has Knocked the Market Back
Crude oil has suffered a kick in the teeth following ceasefire headlines involving Hamas. Of course, ceasefires and renewed conflict can arrive with remarkable frequency, so the immediate market response should be treated with a degree of caution.
Technically, WTI failed at the bottom of the previous gap around $85.50. That is a negative development and leaves the 50-day moving average at $81.06 as the next support level.
- Failed resistance: $85.50
- First support: $81.06 at the 50-day average
- Major support: $76.09 at the 200-day average
- Potential rebound target: $87
For those looking to buy crude oil, the more attractive area may be closer to the 200-day moving average around $76.09. From there, the top of the recent gap near $87 would be the obvious upside target.
Key Levels to Watch Into Next Month
Across the markets, the most important theme is whether the major indices can convert their current support into decisive breakouts. The FTSE 100 needs 11,100, the DAX needs to hold 25,300, and the Dow needs a break above 52,700.
In crypto, Bitcoin must defend 63,400 to avoid a likely move towards 61,000, while Ethereum has the opportunity to challenge its 200-day average at 2,110. Gold remains a market to treat carefully due to recurring RSI failures, and crude oil may offer a more attractive buying opportunity closer to its 200-day average.
Among the smaller shares, the strongest chart structures are those with rising moving averages, RSI rebounds above 50, and clear channel or pattern breakouts. Georgina, European Green Transition, Ondo and Xtract all fit that framework, while AEP, Central Asia, Light Science, African Pioneer, Rentokil and Reach have identifiable trigger levels for a renewed upside move.
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.
