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, Ajax, GCM, Georgina, Helium One, IG Design, Jubilee Metals, Microlise, Medpal, Power Probe, Reveille.
The FTSE 100 has produced a useful bear trap, Bitcoin has held above its 50-day moving average, and several small-cap shares are starting to show rather more encouraging chart patterns. Opportunities exist, but the key distinction is between a promising setup and a confirmed breakout.
Across this October 9 chart rundown, the focus is on the levels that need to break, the support that needs to hold, and the upside that could follow. Unless stated otherwise, the longer-range targets refer to the end of the following month. These are conditional technical scenarios, not guaranteed destinations.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Stock Market Indices: The FTSE Leads the Rebound
FTSE 100: A Bear Trap Below 10,400
After dithering around the floor of its rising channel, the FTSE 100 briefly pushed below 10,400 before bouncing sharply. That is the sort of bear trap this market seems to specialise in: a move beneath support that fails to develop into a sustained breakdown.
There is also a useful bullish divergence. The index made a lower low in the preceding session, but the relative strength index, or RSI, made a higher low. That suggests the latest price weakness was not matched by weaker momentum.
The immediate level to beat is 10,600. A break above that would open the way towards the July resistance line and the 50-day moving average at 10,728.
The alternative is another failure. An end-of-day close below the 200-day moving average at 10,471 would bring a potential base around 10,220 into consideration, corresponding to support established after April. For now, the divergence gives the rebound a reasonable foundation for at least a test of 10,600, and hopefully a little more.
DAX: Holding Support, but Not Exactly Racing Ahead
The DAX is less dynamic. It is hovering around its 200-day moving average and the floor of a rising trend channel, with the key area at approximately 24,800.
Above that level, the September resistance line around 25,400 is the obvious objective. Given how slowly this market is moving, there is not much point getting carried away with targets beyond that.
If support gives way, the first hope is that July support around 24,500 holds. The more bearish fallback is June support near 24,100.
Dow: The April Channel Is Still Intact
The Dow has held the floor of its rising trend channel from April, running at roughly 51,000. The nearby resistance line is tight, but it did contain the index for a couple of sessions.
A break through approximately 51,400, either in the current session or the next, would put the 50-day moving average at 52,600 in play.
The reservation is momentum. With RSI still in the low 40s, the chart remains rather soggy. A test of the 200-day moving average at 50,300 is therefore still a possibility if the rebound fails to gather strength.
Bitcoin and Ethereum: Two Very Different Tests of the 50-Day Average
Bitcoin: Buyers Arrive Before the Moving Average
Cryptocurrencies have wilted this week, and then wilted a little more. Even so, Bitcoin has offered one encouraging detail: its latest decline approached the 50-day moving average without actually touching it.
The average sits at approximately 80,400. While Bitcoin remains above it, a retest of recent resistance at 87,000 remains the working upside scenario.
I had previously highlighted the possibility of limit orders near the 50-day line to catch a dip. The fact that the price turned before reaching it is consistent with buyers stepping in early, although the chart cannot tell us exactly which orders were responsible.
With RSI around the neutral 50 level, the technical picture looks more half full than half empty. Holding 80,400 is the important condition.
Ethereum: The Range Floor Matters More Now
Ethereum has been a different story. A similar idea of looking near the 50-day moving average did not hold up nearly as well, because the price went straight through that level at 2,547.
Instead, Ethereum returned towards the floor of its recent range around 2,380. For anyone still constructive on the chart, that now looks the more defensible area to assess a possible entry than the broken moving average.
The best-case recovery would take Ethereum back towards the top of the range at 2,800, with a potential extension to 3,000 by the end of the following month. That is the optimistic scenario, rather than a recovery already secured.
Gold and Crude Oil: Better Setups, with Conditions Attached
Gold: A Brighter Chart Needs Better Momentum
Gold has been difficult for a couple of months, but the latest price action is slightly more encouraging. It briefly overshot the June uptrend line around 4,120, then broke an August resistance line at approximately 4,117.
Above 4,117, the upside reference is the 50-day moving average at 4,330. That is a brighter picture than we have had recently.
What is still missing is a convincing move in RSI back above neutral 50. Without that improvement in momentum, recent resistance at 4,220 could prove to be the limit of the rally rather than a stepping stone to 4,330.
Crude Oil: The Gap at $97 Is the Upside Reference
Crude oil is still bouncing around its 50-day moving average, with the relevant support area approximately $88.13 to $89.13. Holding that zone keeps the bottom of the gap at $97 in view, potentially by the end of the following month.
There is also plenty of political noise in the mix. Trump’s latest comments add another variable, with the midterm elections part of the backdrop. That makes it particularly important not to treat a chart target as a certainty.
On the downside, the channel floor and 200-day moving average converge around $83.63. If the current support area fails, that becomes the favoured technical destination.
Smaller-Cap Shares to Watch
- Ajax: A Break Above 7p Could Change the Picture: Ajax is in the news, including through its investment in Reveille, and the chart is starting to look interesting. The shares have gapped towards recent resistance around 7p to 7.25p, following a rebound from RSI 50 and support on a rising 50-day moving average. The 200-day moving average is also rising. There is the possibility of a developing golden cross, where the 50-day average crosses above the 200-day average, although that is not yet something to take for granted. The key is a break above 7p. If that comes through, the upper boundary of the rising channel from April points towards roughly 12p to 12.75p. Allowing for a slightly steeper channel, I would round the best-case objective to 13p by the end of the following month. That upside case depends on the shares remaining above the July support line at 5.8p.
- GCM: An Extended Consolidation May Finally Be Ending: GCM has had plenty of ups and downs, with a mid-move consolidation stretching back to August. It now looks as though the shares may finally be getting on with the next leg higher, helped by RSI bouncing above neutral 50. Above the September resistance level at 17.25p, the target is up to 27p by the end of the following month. That is a fairly brave breakout call, but there is a particularly useful feature behind it. After moving above the 50-day moving average in mid-August, the shares repeatedly found support comfortably above that average. That is a strong leading setup: buyers have not needed a full retreat to the moving average before stepping in. It is not something that appears on every chart.
- Georgina: A Bull Flag Above the Channel Floor: Georgina has bounced twice from the floor of its rising trend channel near 8p. The immediate requirement is an end-of-day close through the 50-day moving average at 12.25p. A swift break above that line would point towards 17.8p to 18p by the end of the following month. A further test of the channel floor at 8p would be another possible setup, but the current price action looks too strong to make that the preferred expectation. The pattern resembles a bull flag ahead of another move higher, supported by two rebounds from RSI 50.
- Helium One: Old Resistance Needs to Become Support: Helium One sprang to life during the week. The useful development now is that the shares have found support at and above the old August resistance level of 0.4p. That is the level I want to see maintained. Above 0.4p, the initial upside objective is 0.57p. The more ambitious scenario is a move to 0.9p by the end of the following month. That is a stretch target, and there is no clear catalyst identified here to explain what would deliver it. If it happens, it would merit a fairly large pat on the back. For now, the practical test is simply whether 0.4p holds.
- IG Design Group: A Rising Channel with a Clear Weekly Trigger: IG Design Group has a particularly attractive rising trend channel extending back to November of the previous year. The shares have just pushed through the 50-day moving average, alongside a rebound from RSI 50. The confirmation level is recent resistance around 95p. A weekly close above 95p would support a move towards £1.25 by the end of the following month. Ideally, the shares remain above the price-channel floor at 90p throughout. That keeps the rising structure intact rather than turning a promising breakout into another false start.
- Jubilee Metals: A Bear-Trap Gap Reversal: There is a sneaky feeling that Jubilee Metals may be turning around. The shares gapped up from their lows in the preceding session, producing a bear-trap gap reversal, and pushed through the resistance line at 2.25p. Above that line, the target is the 200-day moving average area around 3p by the end of the following month. It is a punchy call, but the chart is punchy too. Remaining above recent resistance at 2.15p would help preserve the reversal setup.
- Microlise: The Initial Target Has Given Way: Microlise is a company I have spoken with fairly regularly, and its chart deserves attention even if it is not on everyone’s radar. The shares have pushed through the initial target at 57p and also moved above the 200-day moving average. Remaining above that average opens the way towards 73p, the upper parallel of the rising trend channel from May. The target timeframe is the end of the following month, with recent support at 54p providing an important reference for the bullish case.
- Medpal: A Strong Response to Early-Week Weakness: Medpal managed to fight off the bearish move earlier in the week. What stood out was that the decline stopped above the 50-day moving average, followed by a gap higher in the preceding session. Above the floor of that gap at 5.8p, the shares look capable of at least retesting 8p in the coming days. The best-case objective remains 10p by the end of the following month, matching the projected resistance line extending from November. That has been the longer-standing ambition, but the essential condition is still support at the 50-day moving average, around 5.25p.
- Power Probe: Breaking the Falling Channel: Power Probe is breaking through both its 50-day moving average and the top of a falling trend channel around 58p. Above 58p, the upside reference is 71p to 72p by the end of the following month, where the shares would meet the 200-day moving average. The bullish scenario remains valid while the price holds on the right side of the mid-50s. That is the support area to keep in mind if the breakout is tested.
- Reveille: Strength Justifies a Higher Target: Reveille, which has Mike Pompeo as non-executive chairman, has shown enough strength to justify revisiting the original upside objective. The initial target was around 11p, corresponding to the 200-day moving average. If the shares establish themselves above that average, the chart supports an upgraded target at the top of the rising trend channel from July. That puts 16p to 17p in view by the end of the following month. Ideally, recent intraday support at 8p remains intact throughout.
The Common Thread: Support First, Targets Second
The strongest setups in this rundown share a useful characteristic: they are either reclaiming resistance or finding support before reaching a major moving average. The FTSE’s bear trap, Bitcoin’s early rebound and GCM’s repeated support above its 50-day line all fit that theme in different ways.
But the conditions matter. A target becomes more credible when the relevant breakout is confirmed and the underlying support continues to hold. Until then, it is a scenario to assess, not a destination to assume.
Important: This chart commentary is for information only and is not investment advice. Independently research and verify any information you intend to rely on, and consider professional financial advice before making investment decisions. Vox Markets is not regulated under UK financial services law.
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.
