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, ASOS, The Beauty Tech, Ceres Power, First Class Metals, Light Science, Metals One, Seraphim, Tap Global.
It is one of those markets where levels matter more than opinions. Across the major indices, crypto, commodities and a handful of UK shares, the charts are setting out some very clear battle lines for the days and weeks ahead.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
The broad picture is fairly simple. Some markets are sitting on key support and trying not to crack. Others are pressing into bullish continuation patterns. And in a few cases, particularly crypto, price action is starting to reveal intentions in a way that is difficult to ignore.
FTSE 100: Still leaning on the floor of the rising channel
The FTSE 100 is still hovering around the base of the rising trend channel that has been in place since October. There has been a bit of wiggle room on the downside, with the day’s low around 10,151, but the more meaningful best-fit support line still comes in closer to 10,190 on an end-of-day closing basis.
That leaves the index stuck in a fairly well-defined range.
- Support: around 10,190
- Near-term resistance: the 50-day moving average at roughly 10,325
- Upper resistance zone: 10,325 to 10,350
If the lower end gives way, the first notable stopping-off point is around 10,080, which ties in with the initial March support area. If selling deepens beyond that, attention turns to the 200-day moving average at 9,882.
That 200-day line may be where more cautious bulls start to step back in. On the upside, a break through the April resistance line would open the way towards 10,500.
For now, the FTSE is a range trade until proven otherwise.
DAX: Pressure building below the 200-day moving average
The DAX ended last week by breaking below both the 200-day moving average at 24,100 and the March uptrend line. That was not ideal, and it leaves the market vulnerable while it remains beneath those lost support levels.
The next area under pressure is the 50-day moving average at 23,700. If that fails to hold, the worst-case near-term level is 23,400, which also matches the initial April gap floor.
The RSI has now slipped below the neutral 50 level, which reinforces the idea that momentum has turned softer. The longer the DAX stays under the 200-day line, the greater the risk of a move down towards that 23,400 zone.
Dow Jones: Remarkably strong despite oil surging
The Dow continues to look surprisingly resilient. Even with oil prices charging higher, the market is still trading at or near record highs. However one chooses to explain that, the chart itself remains constructive.
At the moment the Dow appears boxed into a range between:
- 48,700 on the downside
- 50,000 on the upside
As long as the RSI holds above neutral, currently around 55, and the 50-day and 200-day moving averages continue to rise, the upside bias remains intact.
Looking further out, the projected target is 52,600 by the end of next month, based on a November resistance line projection.
Bitcoin: Failing where it really should have done better
Bitcoin is starting to look a lot less convincing. In previous recovery phases, such as January and October, failure tended to happen at the top of the recovery channel. This time the market has not even managed that. Instead, it has repeatedly failed just below the 200-day moving average at 81,400.
There have been several attempts to clear that level, and all of them have fallen short. That is not what bulls want to see.
The best immediate hope is a test of the 50-day moving average at 75,000. Even if Bitcoin then recovers and pushes back through the 200-day line, that 75,000 area has become a key marker for whether the market can stabilise first.
Momentum is also weakening:
- RSI: around 44
- Below neutral 50
- Uptrend in the RSI window has already been broken
If there is an end-of-day close back below the 50-day moving average, the worst-case scenario becomes a move down towards 70,000.
Ethereum: Weaker than Bitcoin and still vulnerable
Ethereum never looked quite as impressive as Bitcoin on the rebound from February, and that relative weakness is still showing.
Recent price action failed to reach the top of the recovery channel. Instead, the rally stalled around 2,400, well short of the 200-day moving average at 2,593.
Last week, Ethereum also lost the 50-day moving average at 2,259, which adds to the downside risk. The next key support is the uptrend line from February, near 2,080.
If that breaks, the market could slide towards 1,900, an area tied to post-February and post-March support.
The RSI is around 34. That is weak, but not yet oversold, which means there is still room for further downside before any technical exhaustion argument really comes into play.
Gold: Disappointing action under key trend support
Gold has been disappointing. Rather than bouncing decisively, it has been grinding along the bottom of the October uptrend line. That support comes in around 4,540.
If that level continues to fail, the next major downside target is the 200-day moving average at 4,349. A move there would be significant, not least because it would mark the first test of that long-term moving average in nearly two years.
On the upside, while gold remains above recent support and above the 4,500 level, there is still scope for a rebound towards the 50-day moving average at 4,718.
Even so, that is currently the limit of expectations, given how consistently the market has failed around that area over the past couple of months.
WTI crude oil: Buzzing higher with room for more
Crude oil still looks lively. The market has broken through resistance at around 105.80, and above that the next straightforward target is at least 110.
If geopolitical tension intensifies and the market really starts to run, there is even a best-case upside scenario towards 140 dollars by the end of next month.
On the downside, the current floor is defined by:
- the lower bound of the channel from January
- the 50-day moving average at 97.47
That gives a practical expected range of roughly 97 to 110 dollars for now. With the RSI near 59, oil is still not overbought, so there is room for the move to continue.
Stock charts in focus
ASOS: A push above the 50-day line revives the chart: ASOS has moved above the 50-day moving average at 230p, and that improves the technical picture materially. The suggested fundamental trigger is free cash flow, but on the chart the key point is that price is back above a useful support marker. While the shares hold above the 50-day line, the path looks open towards the top of the rising channel at around 285p, potentially by the end of next month. The RSI is in the low 50s, which is often a good spot for a trend to continue. More cautious traders may prefer to wait for a break above 250p before assuming the move is fully under way. If that happens, there is even scope for a best-case move towards 320p, based on the July resistance line from last year.
The Beauty Tech Group: Building a new range above old resistance: The Beauty Tech Group is shaping up well. The chart suggests the shares may be pushing into a new trading range, with the old resistance around 330p now potentially acting as a floor. Above that level, the next target is around 375p by the end of next month. That is a strong combination. The technical view would start to look suspect only if the shares fell back below 320p on a consistent two to three day closing basis.
Ceres Power: One of the cleaner bull flags around: Ceres Power is shaping a very tidy bull flag near the highs, in the 700p to 785p region. If the pattern plays out properly, the shares should break above the 770p area and head as high as 980p pounds by the end of next month. It is one of the better-looking continuation patterns on the list. Only a move back below 700p would really delay or undermine the upside scenario.
First Class Metals: A useful bounce from the rising 50-day average: First Class has been volatile, but there is a clear technical positive here. The shares bounced off a rising 50-day moving average, which is often a decent buy signal by itself, and they also moved through recent resistance at 2p. That leaves the door open for a move towards 3p by the end of next month. The key question is whether the market respects that recent ricochet from the rising 50-day line. If it does, the upside case remains alive.
Light Science: Bear trap island reversal points higher: Light Science appears to be recovering well after its heavy placing. The technical picture is described as a bear trap island reversal, supported by two gaps to the upside. The shares are now breaking a resistance line from October. Above roughly 2.5p, the chart points towards 3.5p, perhaps as soon as the end of next month. When a stock shrugs off bad news and starts gapping higher, that often gets attention quickly. This one has that look about it.
Metals One: Recovery mode after the deep freeze: Metals One is trying to recover after a brutal decline from the old 50p to 60p area. At present, the important point is that the shares are finding support above the 50-day moving average at 1.66p. As long as that continues, the stock looks capable of retesting the 2p to 2.5p area by the end of next month. The line in the sand is around 1.5p. Staying above that keeps the recovery theme intact.
Seraphim Space: Still rocketing: Seraphim has already met the previous target around 235p on several occasions, and the chart still looks lively. Above that level, the next target is 300p, potentially by the end of next month.
The shares have been among the better performers this year, and the chart remains firmly in upside mode.
Tap Global: The acid test for whether this move can stick: Tap Global is at an interesting point. The key question is whether this latest rally, helped by the Tap Earn initiative, can hold rather than fade as previous moves have done. That 2p level marked the top of the broadening triangle from February, so getting there was already a notable achievement. While the shares remain above the 200-day moving average at 1.65p, the chart points to the full upside scenario of 3p plus by the end of next month.
This is one to monitor closely because the structure has improved a lot. If the move can sustain itself, there may be more to come.
The key takeaway
The overall market picture is mixed but clear enough. The FTSE and DAX are testing support and need to prove they can hold key trend lines. The Dow remains impressively firm. Bitcoin and Ethereum are both under pressure, with Ethereum looking especially vulnerable. Gold is struggling to regain momentum, while crude oil is still the strongest of the major macro charts.
Among the individual shares, the more interesting setups are the ones with clean continuation or reversal patterns already in place. Ceres Power, The Beauty Tech Group, Seraphim and Tap Global all stand out in that respect, while ASOS and Light Science are trying to turn improving technical structures into something more durable.
At this stage, it is very much a market for respecting the levels. Many of these charts are near decision points, and the next move will likely come from whether support holds or whether resistance finally gives way.
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.
