Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are the FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, WTI Crude Oil, SpaceX, Andrada, African Pioneer, GCM, London BTC, Mercantile Ports, Renalytix, Sancus, Yellow Cake.
The broad market picture remains constructive. Progress is not always fast, and several instruments are sitting just beneath key resistance, but the technical backdrop is generally pointing higher while support levels continue to hold.
Here is the chart rundown across the FTSE 100, DAX, Dow, Bitcoin, Ethereum, gold, crude oil and a selection of UK-listed shares. As ever, the key is to respect the levels. A bullish setup remains bullish only while the relevant support and moving-average zones remain intact.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: A Break Above 10,820 Could Open the Way to 11,000
The FTSE 100 is hovering around the former support area at 10,820, which has now become near-term resistance. The important signal would be an end-of-day close above that level.
That would support a move towards the top of the rising channel in place since late March, with a target around 11,000 by the end of next month.
The bullish case remains valid while the index stays above the channel floor near 10,710. The Relative Strength Index, or RSI, is sitting in the upper 50s, which is a constructive position and leaves room for a further move higher.
The FTSE did test the base of its channel late last week, so the current recovery is encouraging. It may remain a slow grind rather than a dramatic breakout, but the technical bias is still upwards.
DAX: Channel Targets Point to 26,600 and Potentially 27,400
The DAX has bounced effectively from its old July resistance around 26,000. The pullback reached roughly 25,900, but the chart now looks set to retest the upper portion of the rising channel that has been developing since late February.
The first target is around 26,600, ideally during the first half of September. Beyond that, the upper parallel of the channel points towards 27,400 by the end of next month.
On the downside, the 50-day moving average around 25,400 should provide the key support area. The RSI has recovered above the neutral 50 level, another sign that the balance of risk remains to the upside.
Dow: Holding Above 52,500 Keeps the Recovery Case Alive
The Dow has absorbed much of the recent market pressure rather well. With Nvidia results due later in the week, there may be some volatility around major US technology names, but the Dow’s own technical structure remains relatively resilient.
The index has bounced above its 50-day moving average, while the RSI has climbed back above the neutral 50 area. As long as the Dow remains above 52,500, the initial expectation is for a return to the 54,200 zone seen earlier this month.
The more ambitious scenario would bring the top of the channel into play around 55,500. A move towards the lilac trend-line area near 56,300 would be the best-case outcome by the end of next month.
Bitcoin: Moving Averages Turn Higher as 83,000 Comes Into View
Crypto has been one of the brighter areas recently, and Bitcoin has delivered a particularly encouraging technical development. The price has moved through the gap above the 200-day moving average, while both the 50-day and 200-day averages are now rising.
A golden cross, where the shorter-term average rises above the longer-term average, is expected during September. It is not a guarantee of gains, but it is another positive feature in a chart that has begun to improve materially.
Near-term support sits around 75,000, with a little flexibility down to 74,000, a level that previously acted as resistance during the decline. As long as Bitcoin holds above 74,000, the focus is on the major resistance area around 83,000, potentially by the end of next month or sooner.
For a useful explanation of how moving averages and momentum indicators are commonly used, see this guide to the Relative Strength Index and this overview of the golden cross.
Ethereum: Bull Flag Structure Supports a Move Towards 2,800
Ethereum gave an early hint that the wider crypto market was turning higher. The chart is now forming a bull flag above the major up-day level at 2,340.
Holding above that level keeps the rising-channel target in play around 2,800 by the end of next month. The extended period of RSI support at or above the neutral 50 level since early July has helped turn the chart decisively more positive.
The key point is simple: Ethereum has shifted from merely holding support to building a consolidation pattern that can support another leg higher.
Gold: Above the 200-Day Average With 4,770 to 4,800 as the Next Target
Gold has broken above its 200-day moving average and, importantly, has managed to stay there without any significant retest. That moving average comes in around 4,516.
The latest resistance to give way was near 4,590. Above that level, the next target is the old May peak in the 4,770 to 4,800 area, potentially over the next two to four weeks.
Should there be a sudden pullback, the expectation is that the 200-day line around 4,516 would provide the principal support. Until proven otherwise, the breakout above that moving average remains the dominant feature of the chart.
Crude Oil: 84 to 85 Needs to Hold for Another Attempt at 88
Crude oil has been slightly frustrating for bulls. The market has not yet managed to get through the resistance around $88, and even the $87 area has proved difficult.
Initial support lies in the $84.50 to $84.80 region, approximately where the market is currently trading. A failure there could lead to a test of the channel floor closer to $79.
However, the RSI remains in the mid-50s, which keeps the more constructive scenario alive. Ideally, the $84 to $85 zone becomes a platform for another push through $88 and eventually towards $93, the old July peak.
SpaceX: Range-Bound Between 130 Support and the 50-Day Average
SpaceX is currently trapped between the 50-day moving average, just under 142, and recent support around 130. There is not much to add until one side of that range breaks.
A move through the 50-day average would point towards the 200-day moving average around 156. On the downside, a break below 130 would expose support near 125, which marked the late July and early August resistance area.
The RSI has already bounced from the neutral 50 zone, suggesting that a move back above 141 remains the more likely near-term destination, even if the advance later struggles.
The Levels That Matter Most
The common theme across these charts is the importance of former resistance becoming support, rising moving averages and RSI readings above neutral. Those are the conditions that keep the upside targets in play.
- FTSE 100: 10,820 resistance, 10,710 support and 11,000 upside target.
- DAX: 26,600 is the initial target, with 25,400 as key support.
- Bitcoin: Holding 74,000 keeps 83,000 in focus.
- Ethereum: Staying above 2,340 supports the 2,800 channel target.
- Gold: Above 4,590, the 4,770 to 4,800 region is the next objective.
- Crude oil: The $84 to $85 zone needs to hold before another attempt at $88.
- Yellow Cake: Above the rising 200-day line at 580p, the 635p to 640p area remains in view.
Technical analysis is about probabilities rather than certainties. The bullish scenarios outlined here depend on markets maintaining the support levels that underpin them. When those levels hold, the path of least resistance remains higher.
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.
