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, WTI Crude Oil, Avacta, Cadence, CML Microsystems, Clean Power, EnergyPathways, Eurasia, 80 Mile, Great Western, Kendrick, Nativo, Panther Metals.
The market tone at the moment is fairly simple: plenty of charts are still trying to hold together, but the margin for error is tightening. Key support levels are doing a lot of the heavy lifting, RSI readings are becoming more important, and in several cases geopolitical noise, especially around oil, is distorting what would otherwise be cleaner bullish setups.
That means this is one of those periods where levels matter more than stories. If support holds, a good number of markets still have credible upside targets. If it gives way, there are some obvious trapdoors underneath.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: 10,200 remains the line in the sand
The FTSE 100 is still just about on the right side of 10,200, which is the floor of the rising trend channel running from October. For now, that keeps the structure intact.
On the upside, the main cap remains the resistance line from February, sitting around 10,550. That is the maximum near-term upside target while the index stays above 10,200. Before that, the 50-day moving average at 10,370 is the initial objective.
If 10,200 breaks, the picture turns much less comfortable. There is not much obvious support on the right side of 10,000 apart from the old March support area near 10,080. Below that, the more serious fallback is the 200-day moving average at 9,853.
The RSI is below the neutral 50 level, and with crude oil firming again, the FTSE is not getting much help from the wider backdrop. Unless that changes, the recovery case remains fragile.
DAX: messy, but still with a technical cushion
The DAX has been untidy, and the standout pattern is a two-day island reversal in the middle of last week. The index is also below the old April peak at 24,800, which leaves open the risk of a pullback.
The first significant downside level is the 200-day moving average at 24,100. If things really soften, the 50-day moving average at 23,700 becomes the more pessimistic target.
There is, however, a constructive detail here. The RSI is still above neutral 50, and there appears to be an uptrend line sitting at roughly the same level as the 200-day average. Better still, that 200-day average is still rising. So while the index has looked messy, the broader technical support is not yet broken.
Dow: still waiting for a clean break higher
The Dow remains boxed in a range between roughly 48,700 to 48,800 on the downside and 50,000 on the upside. The big call remains the same: a break through 50,000 should open the way towards 52,500, with that target pencilled in by the end of next month.
If the breakout comes quickly, perhaps helped by an easing of Iran-related tensions, the move could arrive faster than expected. The moving averages are supportive too, with both the 50-day and 200-day lines rising.
Without the current oil shock, the market would probably be looking for 52,000-plus rather more aggressively. If instead there is a rug-pull, support comes in around the 50-day line at 47,800.
Bitcoin: still below the 200-day line, but not all doom and gloom
Bitcoin continues to flirt with its 200-day moving average without reclaiming it properly. That line sits near 82,500, and price has now effectively failed below it again. It is an odd setup, almost a third attempt to retake that area.
While Bitcoin remains below the 200-day line, the broader stance is still notionally bearish, stretching back to the break under the 200-day average near 110,000 at the beginning of November.
Support sits around 77,000, which held in the first few days of May. Worst case, there is a test of the 50-day moving average at 74,000.
If there is an end-of-day close back above the 200-day average, then the door opens to the late January resistance zone around 91,000 by the end of the month.
Importantly, the RSI is still well above neutral 50, and there is an RSI uptrend line in place as well. So despite the awkward price action, the technical picture is still more glass half full than half empty.
Ethereum: still in its channel, but 2,400 keeps capping progress
Ethereum remains inside a rising trend channel from February, which at least preserves a constructive medium-term structure. The top of that channel is around 2,560, although at present that feels a fair distance away.
The real frustration is repeated fading near 2,400. That ceiling has been hard to break, and until it gives way, the market risks more sideways-to-lower action.
On the support side, there is an RSI uptrend line helping the case for stability, and the 50-day moving average at 2,240 is rising. Below 2,400, the risk is of a retreat towards that 50-day line, with the floor of the channel near 2,080 as the more bearish fallback.
Gold: oddly subdued for such a bullish market favourite
Gold has been behaving a little strangely. For something that is supposed to be one of the market’s strongest bullish stories, it has repeatedly struggled with the 50-day moving average, not only recently but also back in April.
There is support around 4,550, and while that level holds, the market can still look back towards the 50-day average at 4,769.
That said, the RSI has slipped to 48, just under neutral 50, which suggests the market may first need to retest the uptrend line from October before any serious upside resumes. In other words, gold may need to reset before it can push properly higher again.
WTI Crude Oil: bullish again, but 99 is still the pivot
Crude oil is back on a firmer footing after a soft finish to last week. The chart is still dealing with the $99 area, which acted as resistance on the way up last month and is now the key pivot.
At the moment, the likely range looks to be:
- Resistance: 99
- Channel floor: around 92
- If 92 breaks: a move into the mid-80s becomes possible
The encouraging detail is that the RSI has moved back above neutral 50 and the 50-day moving average is rising. If oil can hold above 99, then the market is back on track for the $110 area, perhaps later this month.
That would not be especially welcome for broader equity sentiment, but the chart is what it is.
Stocks in focus
Avacta: 81p break keeps 94p in play: Avacta has finally broken through 81p, which had been the key April resistance. Above that level, the long-standing target remains 94p, with the move still favoured by the end of this month. The breakout improves the chances of that target being reached, and momentum has clearly improved over the last couple of sessions.
Cadence: breakout opens the way to 8p and possibly 11p: Cadence has gapped to new near-term highs through the old September resistance at roughly 6.25p. Above that, the immediate target is 8p in coming days. Given the strength of the move through resistance, there is also scope for more than that. The next technical level higher looks to be near 11p, matching the upper parallel of the rising trend channel from August. That gives it a shot at reaching 11p by the end of next month if the momentum remains as strong as it has been.
CML Microsystems: broadening triangle points to 370p: CML Microsystems has broken resistance at 300p, and that shifts the focus to the top of the broadening triangle around 370p. At the current pace, that target could arrive as soon as the end of this month. The technical groundwork had already been there, with a sideways shuffle above a rising 50-day line and an extended RSI 50 rebound. The share price has now started to respond exactly as hoped after that consolidation.
Clean Power: momentum stock with 22p to 23p on the radar: Anything linked to hydrogen or non-fossil fuel energy has been firmly in favour, and Clean Power is no exception. The first target was 7.5p, the second around 13.66p at resistance, and the next objective now sits at roughly 22p to 23p. That move is favoured over the next two to three weeks, especially while the stock remains above 13p. As long as that breakout area keeps holding, the chart stays constructive.
EnergyPathways: settling well at higher levels: EnergyPathways has absorbed its noise rather well and managed to settle at elevated levels, which is a strong sign in itself. The market had been looking for 12p, and that target remains live while the shares hold above the old September peak at 10.3p. That is the crucial support line. Above 10p to 10.3p, the chart also supports a move as high as 16p by the end of next month, assuming the broader market backdrop does not get in the way.
Eurasia: signs of life after a falling wedge: Eurasia has not exactly delivered much recently, but the chart is beginning to improve. There is a falling wedge setup in place, and the shares have broken the 50-day moving average for the first time since the end of January. That 50-day line is around 3p, and above it the target becomes the 200-day moving average at 3.75p by the end of this month. It is one to watch from here, because a proper break of that sort often changes sentiment quickly.
80 Mile: update decent, chart still needs to follow through: 80 Mile has had a decent update, even if the share price reaction has been fairly subdued so far. The chart is at least beginning to improve. New support is coming in around old resistance at 0.9p. If the stock can break the 50-day line at 1p, then the next target is 1.25p by the end of next month. So the setup is there, but it still needs the price action to catch up with the underlying story.
Kendrick: buzzing, with 5.5p in sight: Kendrick is doing a very good job of justifying the enthusiasm around it. The first target at 2.75p has been achieved, the second one at 4.1p followed, and above that the next level to watch is 5.5p, potentially as soon as the end of this month. The stock is clearly buzzing at the moment, and the technical underpinnings are strong too, with two RSI 50-plus rebounds, including one at the beginning of last month.
That kind of repeated momentum reset often supports another leg higher.
Great Western: through 4.1p and aiming for 6p: Great Western is another one that looks very lively. The shares have blasted through the top of the price channel at 4.1p, and that breakout now points to 6p by the end of this month. That target comes from a January or late December resistance line projection. Above 4p, the chart is suggesting not only 6p but potentially more, if the current momentum continues. At the moment, this one looks very much like a stock that has caught the market’s attention.
Nativo: gap higher improves the near-term setup: Nativo did not produce a perfect announcement-led move, but it did manage a gap higher off the lows, and that is usually an encouraging signal. The stock has moved through the 50-day moving average at 0.36p, and from here the focus is on the top of the range at 0.64p by the end of next month. Ideally, the shares now remain above the floor of the gap at 0.31p. If that support is maintained, the recovery setup remains valid.
Panther Metals: constructive chart with 185p as the next big target: Panther Metals finishes the list with one of the more disciplined-looking charts. The shares are trading around 122p and had been targeting 127p, so that level is already close at hand. If 127p gives way, the next upside target becomes the upper parallel of the rising trend structure, which points to roughly 183p to 185p as soon as the end of next month. The technical case is helped by the fact that both the 50-day and 200-day moving averages are rising, which is usually a good sign for trend continuation. While the shares remain above the floor of the gap at 110p, the bias stays firmly on the upside.
Final thoughts
The key feature across these charts is that support levels are being tested without yet being completely lost. That keeps the upside case alive in a surprising number of markets, from the FTSE and DAX through to Bitcoin, Ethereum and a clutch of small-cap stocks.
But there is not much room for complacency. Crude oil remains a major swing factor, gold is not firing on all cylinders, and several headline indices are one poor move away from much deeper retracements.
For now, the best setups are the ones that have already broken resistance and are holding above it. That is where the cleanest opportunities still seem to be.
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.
