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, WTI Crude Oil, Apertura, Halo, Itaconix, Kazera, MedPal, Orcadian, Ocado, Potentially AI, Plexus, Robert Walters, Sunrise Resources.
The overall theme is straightforward: several major markets are sitting at important technical decision points, while a number of smaller shares continue to produce bullish setups. The key is not to get carried away with a single intraday move. The levels that matter are the trend-channel boundaries, the 50-day and 200-day moving averages, RSI behaviour, and most importantly, end-of-day closes.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: Buy Dips While the Rising 50-Day Average Holds
The FTSE 100 is again testing the falling resistance line around 10,620. That has been the obstacle repeatedly, but the encouraging feature is that the index remains above its rising 50-day moving average at approximately 10,441.
As long as the 50-day line continues to rise and price remains above it, the preferred approach is to look for buying opportunities on dips towards that support. A decisive end-of-day close through 10,620 would improve the picture materially and open the way towards 10,750 and beyond.
The RSI is at 54, which is just above neutral and therefore still on the constructive side. The market has spent the past week or so consolidating rather than breaking down, which keeps the bullish scenario alive.
DAX and Dow: Support Levels Define the Range
DAX
The DAX has bounced from the floor of its rising trend channel around 24,600. That was a fairly punchy level to call, but it has held so far. The more pessimistic fallback level remains the 200-day moving average near 24,300.
The immediate requirement is an end-of-day close back above the 50-day moving average at around 24,872. If that happens, the index should have enough energy to move back towards the previous gap top near 25,400 over the coming days.
Dow Jones
The Dow remains a relatively simple range trade. The key support zone is around 52,100 to 52,300, based on the June support line. As long as that area holds, a retest of July resistance at 53,300 remains the upside scenario.
There is a warning from the RSI, where the previous uptrend line has broken. That weakness is already reflected in the price action, but it means the downside risk cannot be ignored. If support fails, the floor of the rising channel around 51,400 becomes the more realistic worst-case target.
Bitcoin and Ethereum: Crypto Is Improving, but Confirmation Is Needed
Bitcoin
Bitcoin is still dithering around the 50-day moving average, but crucially it is on the right side of that line at approximately $63,100. Above that, the obvious resistance is the June peak around $67,000.
It is probably premature to start pencilling in much higher targets while the 50-day line is still falling and the RSI is only modestly above neutral at 52. The nearby support level is $61,000, while a more serious decline could bring the March support projection near $57,000 into play.
Ethereum
Ethereum is in better relative shape than Bitcoin. It has moved above the equivalent breakout level, around $1,840, and that keeps the focus on the old May support area near $1,970.
The important distinction is that Ethereum has already exceeded the comparable previous peak that Bitcoin is still trying to challenge. That makes it the stronger-looking chart of the two for now.
Gold Remains a Disappointment
Gold is still struggling. The resistance line near $4,040 remains firmly in place, and while price stays beneath it, there is a risk of a further move down towards post-October support around $3,900.
The RSI is stuck in the low 40s, which is not a great look. Even if a recovery begins from current levels, the chart suggests that a retest of $3,900 may be needed before gold can make a more convincing push back towards its 50-day moving average.
WTI Crude Oil: A Bull Flag Above $81
Crude oil produced some odd price action on Friday, but the technical situation is becoming clearer. The market is testing the 50-day line around $83.93, while the top of the falling trend channel lies in the $86 to $87 area.
The lower support projection has improved and now points closer to $63, rather than the sub-$50 scenario previously suggested by the chart. More immediately, the bullish setup is a potential bull-flag breakout through $81.
As long as crude remains above the 50-day average, particularly the nearby $81.75 level, the best-case target is a move towards $87. The RSI at 58 leaves the market very much in the game for that move.
Small-Cap Chart Setups
- Apertura Energy: Breakout Through 114p: Apertura continues to look one of the brighter situations. The earlier break through resistance around 96p has been followed by a gap higher through recent resistance at 114p. While the shares remain above 114p, the chart points towards a retest of the June highs around 180p or more, potentially by the end of next month. This is a case of a breakout holding above prior resistance, which is exactly what one wants to see.
- Halo: The Afterglow Continues: Halo remains supported by the recent positive attention and is working within a rising trend channel. The channel base is around 10p, while the 50-day moving average sits just below at roughly 9.75p. As long as Halo holds above that support area, the top of the channel points towards 16p to 17p by the end of next month. More cautious traders may prefer to wait for an end-of-day close above recent resistance at 11.25p before assuming the next leg higher is underway.
- Itaconix: The Lap of Honour: Itaconix has already delivered the first target at 145p and the second target at 170p. At this stage, it is a lap of honour rather than an early-stage breakout. The next chart level comes from 2024 and sits around 190p. Given the strength of the move, that level could be achievable before the end of the month, although this has already been a remarkable run.
- Kazera: Golden Cross and Unfilled Gaps: Kazera has a very interesting setup. The chart has a broadening-triangle base, with the second target at approximately 1.75p. The first target at 1.2p has already been achieved. What adds weight to the bullish case is the developing golden-cross structure between the 50-day and 200-day averages. There are also three unfilled gaps above the market, indicating notably strong recent price action and the potential for a major rerating. After 1.75p, the chart points towards old 2025 resistance just below 2.2p by the end of next month.
- MedPal: Gap-Fill Potential Towards 4p: MedPal continues its land-grab story and has fresh positive company news. Technically, the shares are bouncing from a rising 50-day moving average at around 3.3p. The setup suggests a gap fill towards 4p by the end of next month. The shares first gapped down earlier in the month and have now gapped back up, creating a stronger-looking pattern. The remaining confirmation point is the RSI, which is at 48 and needs to regain the 50 level.
- Orcadian: Aiming for 30p: Orcadian has had a favourable reaction following recent company developments and North Sea speculation. The key technical point is the move above old resistance at 20p. Provided that level holds on a closing basis, the chart points towards 30p next month. Both the 50-day and 200-day averages are rising, creating a developing golden-cross situation that often marks the stronger part of a bullish cycle.
- Ocado: Recovery After the Rug Pull: Ocado suffered an unpleasant rug pull last week, but the overshoot lower looks like the sort of move that flushes out weak holders before a potential recovery. The RSI showed positive divergence at a low reading around 32, and price has bounced. The key level is 166p. An end-of-day close above that old support area would give the shares another chance to recover towards the 50-day average and earlier resistance in the 188p to 189p zone, potentially before the end of the month.
- Potentially AI: Consolidation Above Former Resistance: Potentially AI, formerly Tiger Alpha, has started well. The chart has consolidated between approximately 5.6p and 6.8p, while finding support above previous resistance around 5.5p. This is a constructive pattern. A move towards 10p by the end of next month would not look excessive if the current momentum continues. The presence of Lord Dominic Johnson as non-executive chairman has also helped place the company on the market’s radar.
- Plexus: Bear-Trap Island Reversal: Plexus has gapped through its 50-day moving average around 3.1p. Since the shares gapped down in March, the new move creates a potential bear-trap island reversal. While Plexus remains above the 50-day line, the target is a return towards 4p, which marks the bottom of the March gap. A bullish RSI divergence and an upward RSI trend line add to the recovery case. The priority is simply to remain on the right side of 3p.
- Robert Walters: Bull Flag Above 105p: Robert Walters has broken recent resistance at 106p. The chart is a bull-flag breakout above a rising 50-day average, and the preferred outcome is for the shares to hold above the 105p to 106p area. If that happens, the next target is around 136p by the end of next month. The recovery is already making a decent start, and the breakout level is now the line in the sand.
- Sunrise: Breakout Towards the 200-Day Average: Sunrise has broken resistance around 0.17p. An end-of-day close above that level would strengthen the breakout and point towards the 200-day moving average at approximately 0.25p. The chart has the ingredients of a potentially significant recovery, but as with the other setups, it is the daily close above resistance that converts an interesting move into a confirmed one.
The Levels Matter More Than the Noise
The broad message across these charts is to remain disciplined. Rising 50-day averages, bullish RSI divergence, gap reversals, bull flags and golden crosses are all useful technical ingredients, but they work best when price confirms them by holding above key support or closing through resistance.
- FTSE 100: Above 10,441, focus remains on a break through 10,620.
- DAX: A close above 24,872 would improve the outlook towards 25,400.
- Dow: Hold 52,100 to 52,300 for a retest of 53,300.
- Bitcoin: Stay above $63,100, then challenge $67,000.
- Gold: Below $4,040, the risk remains a move towards $3,900.
- WTI crude: Holding above $81.75 keeps $86 to $87 in play.
For the smaller shares, the standout theme is momentum after breakouts. The best setups are the ones that can hold former resistance as new support. That is where the charts begin to do the heavy lifting.
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.
