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, Aoti, Bradda, Ceres Power, CapAI, Clean Power, Firering, Karelian, Neo, Shuka, Solid State, and Solvonis.
The latest chart setup across the major indices, crypto, commodities and a handful of small-cap stocks is giving a fairly mixed picture, but there are some very clear technical levels worth respecting.
In several cases, markets are sitting right on decision points. Either they push through nearby moving averages and resistance zones and extend higher, or they fail and reopen downside risk.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Here is the rundown, starting with the big indices and working through to the individual stock charts that currently look the most interesting.
FTSE 100: trying to recover from trend channel support
The FTSE 100 has been dithering around the floor of a rising trend channel that can be traced back to October. That lower boundary is not a scientific line in the sand, but it is still useful as a visual guide. The key point is that the market has found support around the early-April zone near 10,330, with the latest low coming in around 10,347.
Price has now moved back above that notional trend line, around 10,380. The next hurdle is an end-of-day close through the 50-day moving average at 10,430. If that happens, the market should be back on track for a retest of the 10,650 area.
For now, though, the chart still needs to prove itself. If the FTSE drops back below 10,300, the next support area opens up near 10,080, which was the March floor. The RSI is still below the neutral 50 mark, so the bias remains slightly negative while the index stays under the 50-day average.
DAX: a cleaner rebound setup
The DAX looks stronger. It has bounced back above its 50-day moving average at 23,900 and has also reclaimed the lower edge of the recent gap around 23,700.
More importantly, the latest price action has held fully above the 200-day line near 24,100. That puts the focus on a retest of the April peak at 24,800, potentially before the month is out. Beyond that, the top of the gap sits around 25,100.
The RSI has also rebounded above 50, which adds weight to the bullish case. Despite oil prices still being relatively elevated, the DAX is behaving rather better than might have been expected.
Dow: still constructive above the recent gap
The Dow remains in a constructive range above the recent gap support at 48,800. As long as that area holds, the market still looks capable of moving towards 50,000.
The more ambitious scenario remains a move towards 52,000 by the end of next month, based on a projection from the November resistance line. On the downside, the 50-day moving average at 47,800 is currently the line that should contain any pullback in the near term.
Bitcoin: frustrating, but still near the top of the range
Bitcoin has been frustrating, but at least it is frustrating near the top of the range rather than near the bottom. Since February, the market has effectively been trapped inside a recovery channel, with resistance around 80,000.
What is really needed now is an end-of-day close above that level. That would open the way to the 200-day moving average at 84,000.
There is a chance, of course, that the market simply waits for the 200-day line to drift lower and then starts to roll over from there. But while Bitcoin remains above recent support around 75,000, the working target remains 84,000.
If there is a sudden rug pull, the main fallback level is the 50-day moving average at 71,800.
Ethereum: stuck, but still biased toward the top of the range
Ethereum is still struggling at the top of a falling trend channel. There have been brief pushes through that line before, so this is not yet a clean breakout, but the upside level to watch is around 2,550, where the top of the February trend channel also comes into play.
That bullish case stays valid while Ethereum holds above the 50-day moving average at 2,188. The price action is still a little stuck overall, but it is at least stuck near the upper end of the range, which is a much healthier place to be than the February low area around 1,750.
Gold: downside bias while below the 50-day average
Gold remains in a relatively soft technical position. The current range looks to run from roughly 4,600 up to the 50-day moving average at 4,864. With the RSI below 50, the bias remains to the downside, which fits with the falling trend channel in place since the start of the year.
If that weakness continues, the worst-case scenario at present is a retest of the lower support zone near 4,253.
WTI crude oil: still the market of the moment
Crude oil remains the standout chart. The market is trading in what looks like a relatively clean range between broken resistance near $92 and the last peak around $105.
Ideally, the market stays on the right side of support and, just as importantly, on the lower side of the psychologically important $100 a barrel level. Unless something new and unpleasant emerges geopolitically or fundamentally, that looks achievable for now.
The RSI has produced a rebound from the 50 area, and that supports the idea of a $92 to $105 range rather than an immediate breakdown. If oil slips back below $92, then the 50-day moving average at $88 is the main downside level currently in view.
Small-cap stock charts to watch
Aoti Inc: target one hit, higher target now in play: AOTI has returned to the list after already reaching the first target at 48p. If the shares can close above that level on an end-of-day basis, the next target is 70p by the end of next month. It is a punchy call, but the chart is punchy too. The key features are: A sideways consolidation above a rising 50-day moving average. Strong move through the 200-day moving average at 42p. Clear sign that the longer-term resistance was overcome decisively
Bradda Head: sideways shuffle can trigger explosive moves: Bradda Head has a very interesting setup. The pattern is a classic one: a rising 50-day moving average with price moving sideways along it. That often acts as the launchpad for a sharp move higher. There were similar bursts in October and September, and the chart is hinting that another may be close. The target here is 2.15p, with support from the floor of the channel near 1.3p. If it moves quickly, it will simply be one of those occasions where the charting worked exactly as hoped.
Ceres Power: still the gift that keeps on giving: Ceres Power has gapped higher again and continues to hold a very constructive shape. The upper boundary of the current channel points towards £6, and that is the target for the end of next month. The chart remains positive while the shares hold above £5, which is enough of a stop-loss reference at this stage. Ideally, the price also stays above Friday’s high at £5.12. As long as there is no end-of-day close back below that level, the expectation remains for a relatively quick move to £6.
CapAI: shaping up better than it has for a while: CapAI is still trying to bounce from the lows, but the chart is looking better now. The 50-day moving average is starting to rise, and the shares are beginning to trade sideways above it, which is usually a constructive sign. The minimum target is 1.5p, which corresponds to the top of the falling trend channel from October. There has already been an RSI rebound through the 50 level, and the immediate trigger would be an end-of-day close above the consolidation ceiling near 1.15p.
Clean Power Hydrogen: next target moves up sharply: Clean Power Hydrogen remains one of the more attractive charts in the pack. There is an unfilled upside gap, and the previous target of 6p was reached very easily. The next level to watch is the upper parallel of the descending resistance line from August, which points towards as much as 13.5p over the next two to four weeks. That upside remains in play while the shares hold above 10p.
Firering Strategic: still a laggard, but a bounce may be forming: Firering has frankly been a bit of a dog, but there may finally be some signs of life. Following the recent fundraise, the chart is showing a hint of bullish divergence. Price has been pressing lower or flat at the lows over the last couple of sessions, while the RSI has held steadier. That is not a full all-clear, but it does support the idea of a recovery back towards recent resistance around 1.4p by the end of next month.
Karelian Diamond: golden cross adds weight to a strong setup: Karelian has one of the cleaner technical setups among the smaller names. Once again, the pattern is the familiar sideways shuffle above a rising 50-day moving average, often the precursor to a more forceful move. The initial target is 1p, and the higher target into the end of next month is around 1.5p. The exact catalyst may not be obvious yet, but the chart structure is certainly there. Support holding above 0.65p, with 0.7p the preferred floor
Neo Energy: a strong recovery from the lows: Neo has been called correctly from the lows and has already moved through the earlier levels in the 0.5p and 0.75p areas. The next target above 0.94p remains 1.3p by the end of next month. This is one of those charts where the trend recovery has already started to prove itself. The main task now is simply to keep building on that strength.
Shuka Minerals: above the 50-day line, more upside opens up: Shuka Minerals has gapped through the 50-day moving average, which sits around 2.87p, and has now managed two sessions above that level. That improves the technical picture considerably. The next target is at least the 200-day moving average around 3.8p. Best case by the end of next month is 5p, although that may prove a little ambitious on such a short timescale. Even so, a four-to-six-week move towards that level remains a reasonable working objective while there is no end-of-day close back below the 50-day line.
Solid State: bear-trap reversal points to range highs: Solid State has delivered a strong move above a rising 50-day moving average, and the catalyst on the chart was a bear-trap gap reversal. That sort of pattern can be very powerful when it catches the market leaning the wrong way. Now that the shares are above the March resistance around 172p, the target becomes the top of the range near 190p, potentially by the end of next month or even sooner. The RSI rebound through 50 adds another positive technical signal.
Solvonis Therapeutics: still encouraging above key moving averages Solvonis rounds off the list, and the chart still looks encouraging. The shares are bouncing from the 200-day moving average around 0.28p, and the broader aim remains a push through 0.31p to 0.32p. If that breakout comes, the next target is 0.45p by the end of next month. The setup is helped by an RSI rebound back above 50 and by the stock holding above a rising 50-day moving average, both of which are usually supportive.
What matters most right now
Across the board, the common theme is quite simple. Plenty of markets are near important moving averages or range highs, and the next few sessions should tell us whether these are genuine breakouts or just temporary rallies within broader consolidations.
The stronger charts at the moment appear to be:
- DAX, for reclaiming both the 50-day and 200-day markers
- WTI crude oil, still trading as the market of the moment
- Ceres Power, Clean Power Hydrogen and Karelian, which all have notably constructive small-cap setups
The more cautious areas remain FTSE 100, which still needs to get back through its 50-day average, and gold, where the bias remains lower while the RSI stays under 50.
As ever, the key is not to get carried away by a promising pattern before the level that matters has actually broken. But where those levels do give way, there is enough on these charts to suggest some decent opportunities into the weeks ahead.
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.
