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,
The start of the week has a familiar feel. A lot of major markets still look heavy; crypto remains soft; gold is struggling to regain any real momentum; and crude has failed to turn geopolitical drama into a proper upside breakout. On the stock side, though, a few charts are still setting up nicely if support levels hold.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100 is still vulnerable below the 50-day moving average
The FTSE 100 is still caught inside a shorter-term falling trend channel that sits within the broader rising channel in place since the end of last year. The shorter channel, which has been developing since March, is the one that matters right now because the index has failed near its upper boundary.
That leaves the market looking exposed while it remains under the 50-day moving average, which comes in around 10,400. As long as that level caps the upside, there is a decent chance of a dip back towards the early June support zone around 10,230 to 10,240.
Even if the market eventually recovers, the near term setup is still awkward. The 50 day moving average is sloping lower, and the RSI is sitting under the neutral 50 mark. For many traders, that is enough reason to lean bearish against the moving average.
The more constructive scenario only starts to come back into play with an end-of-day close above the 50-day line. If that happens, the top of the range and the top of the falling channel around 10,540 comes back into view.
DAX holding its structure, but waiting for a proper breakout
The DAX has spent a lot of time chopping around the 25,000 area, and there has not been much change in that picture. There was a temporary push through resistance, but it did not really alter the intermediate view.
The key feature here is the rising trend channel from March. That gives a floor near 24,500, which also sits close to the 50 day moving average. If the market holds that area, the trend stays intact.
On the upside, a genuine breakout through 25,500 would open the way towards the top of the March channel around 26,300.
The main positive at the moment is momentum. The RSI is around 55, which is constructive and suggests there is still room for another attempt higher.
Dow remains the strongest of the major indices
Of the big indices covered here, the Dow still looks the healthiest. The April rising channel remains intact, with the top of that channel near 52,200 currently acting as resistance.
For now, the focus is on whether the market can hold on the right side of 51,000. If it does, the broader bullish case remains alive. The lower boundary of the channel comes in around 50,400, and beneath that the 50 day moving average is just under 50,000.
The RSI is around 58, which puts the Dow in a better technical position than the FTSE 100 or DAX. If support continues to hold, there is scope for a move towards a longer term resistance projection from November, potentially stretching as high as 53,800 by the end of next month.
That is still a fairly ambitious target, but technically it remains on the table.
Bitcoin still trapped in a weak range
Crypto continues to look flabby, and Bitcoin is not giving much away apart from indecision. The broad recent range remains 59,000 to 67,000.
There has been a slightly higher low around 61,000, which at least hints at some base building. But beyond that, the bullish argument is still thin while the RSI stays under 50.
The bigger problem is the broader falling trend channel that has dominated since late August last year. That downtrend still appears to be controlling the action, and both the 50 day and 200 day moving averages are still pointing lower.
Even if the exact channel width is adjusted a little, the message is much the same. Unless Bitcoin can clear 67,000, there is still a risk of a move into the mid to low 50,000s before any meaningful rebound develops.
Ethereum still under pressure below 1,860
Ethereum has been revolving around the February low at 1,753. Trading around that area is not exactly inspiring, but it does at least suggest the market has not completely fallen apart.
Even so, while price remains below resistance around 1,860, the risk remains tilted towards another move lower. A retest of the 1,560 area is still possible, even if there is a bounce attempt first.
As with Bitcoin, the moving averages are not helping. Both the 50 day and 200 day lines are dropping away quite sharply, which keeps the broader tone negative.
Gold still struggling inside a falling channel
Gold is also looking soft. The metal remains stuck in a falling trend channel that has been in place since January, and momentum is not offering much encouragement.
The RSI sits down around 39, well below the neutral 50 level. More importantly, there has been a repeated pattern of failed RSI recoveries in the mid 40s, which suggests buyers have not been able to build any sustained momentum.
That means even if gold does bounce from here, the upside may still be limited. The chart points to 4,380 as a likely cap before the market goes searching for support again.
Crude oil fails to capitalise on weekend drama
Crude oil had every excuse to push higher, but the market has not followed through. In fact, it looks more like the recent spike has run out of steam.
The best case had been a move back towards the 80 dollar area, which lines up with April support. More precisely, 80.56 was the level to beat. Instead, the move stalled in the upper 70s, around 78 to 79 dollars.
That failure leaves the market vulnerable to another test of the 200 day moving average near 73.85. If that gives way, there is a more bearish possibility of filling the gap left from late February down towards 68 dollars, even if a rebound follows later.
The RSI is oversold around 30, but at the moment that is not enough on its own to call a floor.
Small-Cap’s
Astrid trying to recover after dropping back under 1p: Astrid had its supporters recently, but enthusiasm faded quickly once the shares slipped back below 1p. The chart now looks as if it may be forming a falling wedge, which at least gives some hope of a recovery move. The upside gap from last week has helped sentiment a little. If the shares can break through the 50 day moving average around 0.09p, that could open the way towards the 200 day moving average near 0.12p. That does not rule out another fade afterwards, but it would at least give the bulls something to work with. Ideally, support should hold above 0.08p in the meantime.
Beeks Financial looks one of the more encouraging stock charts: Beeks is shaping up rather well. The chart suggests a mid move consolidation after a strong run, and the fact that price is finding support above the top of the gap is a notably bullish signal. That setup keeps the door open to 270p by the end of next month. It is an ambitious target, but the chart has earned the benefit of the doubt. The key condition is that the shares stay above 200p. As long as they do, the W shaped reversal remains in play and the broader recovery structure looks intact.
Delta Gold needs to prove the low is in: Delta Gold remains in a rising trend channel, but the main question is whether the recent low is already in place. It would be a clear win for the bulls if the shares can find support without needing to test the rising 50 day moving average near 137p. If that happens, the next move could carry back into the 160p to 170p zone. For those wanting a little more confirmation, the RSI is worth watching. It is currently around 47, so a move back above 50 would improve confidence that the worst of the recent selloff is over. The risk case is less pleasant. After the sharp drop from the 220p area, another retreat towards 100p cannot be ruled out. That would amount to a fourth test of that level since the end of April, and repeated visits to support tend to weaken it.
easyJet still edging towards a better technical backdrop: There has been plenty of noise around easyJet and bid speculation, but the chart is more interesting than the headlines. The shares had been looking capable of creeping up towards a descending resistance line from August, with 545p as the broad target. That view still holds while price remains above 500p, which marked Friday’s support. The more interesting development is under the surface. Both the 50 day and 200 day moving averages have started to rise, and the 200 day line in particular is now improving. That means the market is moving towards a potential golden cross setup. Whether or not any corporate action materialises, the technical picture is getting better.
Europa Oil & Gas building nicely after a strong bounce: Europa Oil & Gas has delivered another solid bounce, helped by fresh news flow. The chart has both a trading range and a rising trend channel, and together they point to a possible move towards 2.75p by the end of August. To unlock that target properly, the shares need a convincing break above recent resistance around 1.75p. Ideally, the shares should stay above the floor of the rising channel around 1.25p.
Solvonis Therapeutics needs to reclaim momentum above 0.20p: Solvonis has had decent news, but the share price response has been a little underwhelming. The main frustration is that the stock still does not look fully comfortable above 0.20p. There is a resistance line around 0.30p that now becomes the obvious upside target, but that target only makes sense if the shares can remain above the 0.23p area and if momentum improves. The RSI is currently around 48, so a move back above 50 would help strengthen the recovery case.
T42 looks ready for another leg higher: T42 is shaping up quite constructively. The shares are bouncing from a rising 50 day moving average, and the 200 day line is already trending higher as well. Momentum has also behaved well, with an RSI rebound through the 50 area. Taken together, that suggests the next leg up may already be underway. The standout upside target is 6p, potentially by the end of next month or even sooner. For that bullish case to remain intact, the shares need to stay above the 50 day moving average at 4.3p.
Wishbone breaks out on discovery news: Wishbone, described as the next Greatland Resources, has delivered a technically interesting move. The shares have broken out of a falling wedge at 24p, and that points towards the 50 day moving average at 28p as the next target. The fact that the stock also gapped higher on discovery news gives the move more credibility. Gaps to the upside are especially encouraging when they appear as a share breaks out of a wedge or channel pattern. Even if the shares pause or retreat after reaching 28p, the breakout itself is a constructive change in tone.
The main takeaways for the week
Across the broader markets, the picture is still mixed at best.
- FTSE 100 looks vulnerable while below 10,400.
- DAX is stable but still waiting for a clean break through 25,500.
- Dow remains the best looking of the major indices.
- Bitcoin and Ethereum still lack convincing bullish momentum.
- Gold and crude oil both look softer than many might have expected.
Among the individual shares, Beeks, Europa Oil & Gas, T42, and Wishbone look among the more interesting setups, while easyJet is quietly improving in the background. Astrid, Delta Gold, and Solvonis all have recovery potential, but they still need to prove themselves at key support and momentum levels.
For now, this remains a market where levels matter, momentum matters, and patience probably matters most of all.
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.
