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, , Amigo, Blencowe, First Tin, Hydrogen Utopia, ITV, Oracle, Pensana, Seeing Machines, Tungsten West.
Quick technical read on the FTSE 100, DAX, Dow, Bitcoin, Ethereum, gold and a selection of small cap shares that have caught attention this week. I go through key support and resistance levels, what to watch next and short-term targets where appropriate.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major Indices
FTSE 100
- Critical uptrend line from last month sits at 9,680 (end of day closes need to stay above this).
- There is bearish divergence: higher highs earlier this week versus October but a lower RSI. That suggests downside risk.
- Key support to watch: 9,574 (initial November support). If we hold above 9,680 the upside target is the top of the June channel around 9,840 and, with festive optimism, 10,200 by Christmas.
- If we break below 9,680, expect a move to 9,574 as a potential risk zone.
DAX
- Price is slipping below the rising trend channel from April. The trend line is near 23,700 with the 200 day moving average around 23,300.
- There have been at least two failures at or below RSI 50, which is a continuation signal to the downside.
- Upside trigger: an end of day close above October resistance at 24,100 to get back on a healthier footing.
Dow Jones Industrial Average
- We just missed the top of the May rising trend channel near 48,300.
- Immediate risk is a test of the 50 day moving average near 46,300. While above that the market looks relatively stable.
- If price breaks back below the 50 day line and RSI 50, a deeper retracement to about 45,300 (last month support) is possible.
- Upside path requires a move back through the 47,500 area to target the top of the channel.
Cryptocurrencies
Bitcoin (BTC)
- Bitcoin failed at the old October support area around 104,000 to 103,600 and now risks retesting the June support near 98,000 and then May support near 93,000.
- We need an end of day or end of week close back above 104,000 to break the negative setup.
- 200 day moving average is still rising but the 50 day has been failed twice and is now falling. RSI in the upper 30s is not encouraging.
Ethereum (ETH)
- Ethereum is struggling around the 200 day moving average which has been lost; that 200 day line sits around 3,392.
- Potential downside retest targets are near 3,076 and then support on the way up at 2,910.
- To negate the negative picture we need a sustainable close back above the 200 day line and to clear 3,500.
Gold
- Gold has been consolidating through the week and is bouncing at the top of a rising trend channel from April (around 3,960).
- Immediate resistances: 4,050 then 4,160 (the latter is the near-term best upside expectation).
- RSI double bounce in the mid 40s suggests limited momentum. Most likely we test the 50 day moving average near 3,868 before making a decisive move.
Small Caps and Stocks to Watch
Short take on a handful of bulletin board names that moved this week. Levels are given as stated.
Amigo
- Just breaking through recent resistance at 0.43p. The breakout opens a gap fill target up to 0.62p–0.63p by the end of the month in a best case scenario.
- Amigo remains a high risk situation and gains should be treated with caution.
Blencowe
- Trading in what looks like a bull flag near the highs. Four year resistance at 8p is the next obvious target, possibly by month end if momentum continues.
- Support is the 50 day line around 6p. RSI in the upper 50s is constructive for further upside.
First Tin
- Target hit just above 9p yesterday and the gap at 8p remains intact, which is a positive sign.
- A close above 9.1p (end of day or weekly) is required to aim for the next level around 15p, which currently looks ambitious.
- RSI holding in the upper 50s at the lows suggests strength in this move so far.
Hydrogen Utopia
- Another rise where the market appears to be responding to funding and near term plans. First target around 2.7p with a best case by month end of 4p, retesting the June resistance.
- Key support is the October peak at 2.1p. The triple RSI 50 rebound has been a useful leading indicator on the upside so far.
ITV
- Gapped up through the 200 day moving average and is currently resting on it. Despite potentially positive news, ITV often grinds in a range.
- An end of day close above the 200 day line is needed to give a chance of heading toward the top of the range and the channel from last November where the 88p area becomes an optimistic target.
- Consider this a conditional recovery rather than a confirmed breakout until we see a sustained close above the 200 day line.
Oracle Power
- Brief test of the 50 day moving average at 0.033p. Staying above that keeps the short-term bias bullish.
- Next resistance cluster up to around 0.058p is tough; a material announcement would likely be required to clear it.
Pensana
- The run ran into trouble and the stock is trying to find the bottom of the channel, briefly trading below it with a low around 93p.
- Important level to get back above is the late October support near 102p. Best case by month end would see the 50 day around 129p.
- Staying above the 102p area is key to avoiding a deeper correction.
Seeing Machines
- Decent announcement catalysed a move and we saw a consolidation breakout through 3.75p. Above that, the top of the range and channel from February points to about 4.70p by month end.
Tungsten West
- Processing news produced a gap up and a bounce above a rising 50 day line. We have a double RSI 50 bounce which is constructive.
- While above the rising 50 day line at 9.6p, targets of 14p and maybe 15p by the end of the month are reasonable short term scenarios.
Summary and What I Will Be Watching
- FTSE 100 staying above the 9,680 uptrend line is the most immediate condition to avoid a deeper pullback to 9,574.
- DAX needs an end of day close above 24,100 to break the recent downside sequence; the Dow needs to hold the 50 day around 46,300.
- In crypto, Bitcoin must reclaim 104,000 (and hold it on a daily or weekly close) to halt the negative bias; Ethereum needs the 200 day line back beneath price to improve the outlook.
- Gold looks range bound with the likely near term test of the 50 day moving average. Small cap names show mixed technical setups; many have clear support levels and defined short term targets.
“If we do break below 9,680 then 9,574 is a potential risk for this market.”
More updates will follow over the weekend. Keep stops tight on names that have been volatile and watch for reliable closes above the levels noted before assuming a sustained 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.
