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, Gold, Aferian, Arkle, Blue Capital, CloudCoco, Defence, ECR Minerals, Empire Metals, Fragrant Prosperity, Invinity, Seed, Sundae Bar, Solvonis, Trafalgar.
FTSE 100: A Weekend of Volatility
The FTSE 100 experienced notable turbulence over the weekend, largely attributed to the Iranian bombing spree. Interestingly, the market reaction suggests that most participants, aside from the Iranians, anticipated this event. The index retreated from the 8,900 zone down to a low of 8,740, dipping below 8,700 briefly. However, the market showed resilience with a “nice hammock handle” pattern forming, indicating potential stabilization.
For a bullish outlook, it’s crucial to see the FTSE close above 8,800, which would signal a return to the upward trajectory within the May 2024 rising trend channel. If this momentum holds, the index could reach as high as 9,030 by the end of next month. On the downside, the 8,700 level remains a key support, barring further geopolitical surprises.
Technical indicators provide some encouragement: the Relative Strength Index (RSI) stands at 52, just above the neutral 50 mark, and the 50-day moving average is climbing sharply, both suggesting positive momentum.
German DAX: Eyeing Resistance Breaks
The DAX continues to bounce off its rising 50-day moving average, currently near 23,100. Should it break through the March resistance at 23,500, the index could ascend toward the upper channel boundary of 24,800 by the end of next month. However, geopolitical uncertainties cloud the precise timing of such moves.
Dow Jones: Testing Key Support Levels
As of Friday’s close, the Dow rests at the floor of its rising trend channel established since May last year. The 50-day moving average at 41,400 represents the next potential test. With a firmer market start this morning, there’s hope the index won’t dip much below 42,000 and can challenge recent post-March resistance at 43,000 in the near term.
Bitcoin: Missing the Mark?
Despite widespread enthusiasm from companies adopting Bitcoin and other cryptocurrencies, the market hasn’t reached record highs yet. This discrepancy raises questions about the factors holding back Bitcoin’s surge, even as corporate interest intensifies.
Gold: Struggling Against a Backdrop of Uncertainty
Given the global unrest, one might expect gold prices to break decisively through the challenging 3,400 level. Currently, gold hovers around 3,360, having broken resistance near 3,350 but facing support at the 50-day moving average of 3,314. A sustained move above 3,400 could propel prices toward 3,800 by the end of next month.
Technical signals offer a cautiously optimistic view: the RSI is at 54, above the neutral midpoint, indicating the glass is currently half full rather than half empty.
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.
