Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are for the FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, Anglesey, Bezant, Ceres, Europa, Genflow, Hardide, Hot Rocks, Mirriad, Ocado, Rockfire, and Sulnox.
Markets remain constructive with a familiar mix of steady uptrends and short term consolidations. Momentum indicators and moving averages are doing much of the heavy lifting right now. Where those remain supportive, the bias stays up. Below is a compact technical run through of major indices, crypto, gold and a selection of small cap stocks that are showing interesting chart behaviour.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major indices
FTSE 100
The index is in a mid move consolidation close to recent highs. Price sits around 9,700, trading above the 50 day moving average near 9,600. The channel top offers a best case target of 10,000 by the end of the month, while a nearer term realistic target is the old October/early November resistance around 9,800. The channel floor is near 9,500. RSI in the upper 50s supports the idea of another push higher while the 50 day continues to slope up.
DAX
The DAX has been ranging between the 50 and 200 day lines. Main resistance sits at 24,200. A decisive break would leave room for a move toward 26,000 over the next month, provided the index holds above the 200 day at roughly 23,500. RSI in the mid 50s and a rising 50 day line favour the bulls.
Dow Jones
A pause for breath near the highs, but the trend remains intact. The top of the channel targets around 49,000 by month end while the 50 day support sits around 46,800. Simple and straightforward: keep an eye on the 50 day as the trend guardrail.
Cryptocurrencies
Bitcoin
Bitcoin has met resistance from the October highs, testing the area near 93,000 to 94,000. There was an RSI 50 failure, which is not ideal while price is below 93,000. Immediate support is the uptrend line close to 88,000, with the main 2025 support nearer 80,000 if things weaken. A breakout would put the 50 day moving average just below 100,000 into view as a potential target.
Ethereum
Ethereum has cleared the October line but has so far made limited progress. The technical focus is on holding recent support around 3,000 while avoiding a re-test of the April uptrend line near 2,700. A reasonable upside target is around 3,500, with a near-term retest of resistance reported down toward 3,260.
Gold
Gold is trying to hold the trend line break from last month, with the trend line area talked about near 4,150. If the bullish structure holds, a target of 4,600 by the end of the next month is possible. There is resistance in the mid 4,200s to work through. RSI around 62 and a rising 50 day suggest strength, and dips toward the 50 day near 4,068 could present buying opportunities.
Small cap watchlist
Several small cap names are showing clear technical setups. Each short note highlights the levels and a scenario to watch.
- Anglesey Mining: Since covering this stock on 27 November the shares have rallied roughly 200%. Entry levels were around 0.25p. Resistance was broken through 0.55p, with the 200 day around 0.65p. Best case upside sits near 1.05p, with a gap to fill toward 1.30p if momentum continues. A pullback into the low 0.80p area of old resistance could act as a buying opportunity if it occurs.
- Bezant: Bouncing from the floor of a rising channel that began in July. Immediate support is near 0.07p. A move above the rising 50 day at about 0.08p and a run to 0.13p to retest October resistance is a reasonable target by the end of next month. For cautious traders wait for an end of day close above the 50 day.
- Ceres Power: After a strong September October run the stock is consolidating. The third target was reached around 400p. Best case sees upside to about 530p. If there are dips, the 50 day near 286p is the level to watch, with nearer term support in the low 3p area. Notably RSI has remained above neutral 50 on recent weakness.
- Europa Oil and Gas: Shares are in a fresh leg up inside a rising channel that started in July. The channel top gives a target of around 2.6p by the end of next month while the channel floor sits near 1.75p. The RSI window shows a long lived uptrend line, which is a constructive leading indicator for further gains.
- Genflow Biosciences: Positive commentary has pushed shares higher. A near term target is about 3.22p while support sits at the channel floor near 1.66p. The rising 50 day is helpful. A rising 200 day would strengthen the case for a sustained rally.
- Hardide: Recent corporate news has given the shares a lift. Initial targets are between 10p and 12p, with the upper parallel of the summer channel pointing as high as 15p by the end of the month.
- Hot Rocks: Still benefiting from the WSHP related investment narrative. While staying above the channel floor and the 50 day around 1.25p there is an expectation the shares can reach roughly 3p by the end of the next month.
- Mirriad: Historically weak performance, but the chart has turned more interesting. The stock has broken resistance at about 0.011p. Initial upside targets mentioned earlier around 0.14p to 0.15p have been upgraded to a target near 0.20p by month end while staying above the broken resistance line.
- Ocado: Substantial capital, around $350 million, has flowed in recently. The shares have not yet closed back above the 50 day at roughly 214p. An end of day close above that level would signal a better chance of a rebound. There is bullish divergence in the momentum indicators, and a potential tactical entry could be near the gap floor around 185p.
- Rockfire: Has been a problem child and painful to follow through the recent drawdown. There are signs of bullish divergence and the 200 day sits around 0.13p which also coincides with the channel floor. Above that level a push toward the 50 day becomes possible.
- Sulnox Group: One of the stronger names on Aquis. The initial target near 79p has been hit. If the stock holds above the 200 day near 63p then re-testing past highs around 110p by the end of February is a plausible scenario.
How to use these levels
Technical trading is about probabilities and risk management. Use moving averages and trend channels as your guide rails. When price is above a rising 50 day and RSI is in a constructive range, the odds favour continuation. Key rules to keep in mind:
- Respect the 50 day as a near term trend filter. A lot of the bullish scenarios above require the stock to remain above that line.
- Treat broken resistance as potential support. Many small caps will retest breakouts. If the retest holds, the trend is more reliable.
- Watch momentum signals. An RSI that stays above 50 while price consolidates usually points to further upside. Conversely an RSI failure near 50 is a warning.
- Size positions for the volatility of each stock and use stop levels beneath structural supports like channel floors or the 200 day where appropriate.
Markets will always present both risk and opportunity. Keeping an eye on these technical reference points helps separate the setups with the highest probability from mere noise.
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.
