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, Asiamet, KEFI, Kistos, Mkango, Medpal, Prospex, Rc 365, Serval, Smarter Web, The Works, The Mission Group, United Oil & Gas, World Chess.
Encouraging technical setups appear across the major indices, commodities, crypto, and a fair selection of small-cap shares. The common theme is straightforward: where prices are holding above rising 50-day moving averages, the benefit of the doubt remains with the upside.
That does not mean every chart is a clean buy. Several markets are still range-bound, while others need to clear nearby resistance before the more ambitious targets come into play. As ever, the key is to know the support level that keeps the bullish case intact.
As always, do your own research and treat these as chart-based observations rather than hard recommendationsend-of-day
FTSE 100: Rising Channel Still Points Higher
The FTSE 100 remains inside a rising trend channel that has been in place since the end of March. The immediate hurdle is the resistance line from late July, around 10,860.
An end-of-day close above that area would put the top of the channel near 11,100 into play by the end of next month. October is not traditionally known for spectacular market rallies, but charts do not always respect seasonal expectations.
The preferred stance remains bullish while the index stays above the rising 50-day moving average and the base of the channel, currently around 10,726. Dips back towards that zone should continue to find buyers.
A breakdown looks less likely with the RSI sitting in the mid-50s. If it did happen, July support near 10,400 would become the obvious destination, although a retreat towards 10,600 appears the more realistic downside risk for now.
DAX: Mixed Signals Around 26,000
The DAX has been dancing either side of 26,000, which is not especially helpful in isolation. More constructive is the way the market has held the July gap and bounced above a rising 50-day moving average.
Those price signals favour the upside, even though the RSI is less convincing after an RSI 50 failure. For the near term, the technical benefit of the doubt still goes to buyers on dips towards the 50-day line.
Bitcoin and Ethereum: Range Trading Versus an Upside Flag
Bitcoin remains in the middle of its range
Bitcoin is caught in a broad trading range between roughly $76,000 and $82,000. It is sitting in the middle of that range rather than offering a compelling directional signal.
A golden cross between the 50-day and 200-day moving averages is close, but the price action has not yet developed the momentum normally associated with that signal. Until a breakout arrives, the practical framework is still a range trade between $76,000 and $82,000.
Ethereum looks like a consolidation before another push
Ethereum is also range-bound, recently trading around $2,350 to $2,560. However, the RSI in the low 60s gives this chart a more constructive feel.
The preferred outcome is a break higher towards the upper boundary of the rising channel from February, near $2,900. The chart resembles an extended flag consolidation, a formation that is normally bullish when it develops within an established advance.
If Ethereum breaks lower, the old resistance area around $2,150 should provide meaningful support. For now, this still looks more like mid-move consolidation than the start of a deeper reversal.
Gold: The Channel Floor Is the Crucial Level
Gold is still battling with the floor of its rising trend channel. That support area sits around $4,370 to $4,380, and the key requirement is for no end-of-day close back below it.
If the channel floor holds, the next upside reference point is the 200-day moving average near $4,535. A move down towards the 50-day line at approximately $4,246 would weaken the immediate structure, although an intraday dip to that area may be viewed as a buying opportunity by those who remain bullish on gold.
For a useful overview of how traders use price momentum, see Investopedia’s guide to the Relative Strength Index.
WTI Crude Oil: Bull Flag Above Former Resistance
WTI crude oil remains bullish. The market has formed a bull flag above former resistance near $87, with both the 50-day and 200-day moving averages rising in parallel.
The first objective is a retest of the July high around $93 to $94. A stronger outcome would see crude reach the upper boundary of the rising channel from June, near $101 or higher, potentially by the end of the month.
The hammer candle at the end of last week adds to the constructive technical picture. The old falling channel has become far less relevant because the rising red channel is now in control.
Small-Cap Share Setups
- Asiamet: A long-awaited gap through resistance: Asiamet has suddenly returned to the radar after a long quiet period. The shares have gapped through recent resistance around 1.75p, supported by rising 50-day and 200-day moving averages. There have also been several rebounds in the RSI above 50, another positive leading indication. Holding above 1.75p opens the way towards 2.2p, potentially by the end of the month.
- KEFI: Oversold after disappointing news: KEFI has suffered on bad news, falling towards projected support near 0.65p. The RSI is deeply oversold around 22, a level not seen for a considerable period. The hope is that the low of the day becomes the swing low, producing an “80-mile” style reversal. Ideally, the shares can at least retest the base of the previous gap near 0.93p to 0.94p, even if they later fade again. One point worth noting is that the previous failure below a falling 200-day moving average gave a technical warning that something was wrong before the adverse developments arrived.
- Kistos: Above £3, with £3.80 in sight: Kistos has followed through on its constructive setup. The shares have bounced above rising 50-day and 200-day moving averages and broken through recent resistance at £3. The longer the price remains above £3, and preferably above the gap area around £3.05, the greater the chance of a move towards £3.80 by the end of the month or sooner.
- Mkango: Building momentum from the mid-30s: Mkango’s anticipated bounce from the mid-30p area has materialised. The 50-day moving average is now rising, the RSI is above 50, and the shares opened at the low and moved to the high of the day, all of which are constructive signs. The next important test is the resistance line from October near 48p. A sustained break above that level would point to 60p by the end of next month. The bullish case requires no end-of-day close back below the 50-day line around 39p.
- MedPal: September target reached early: MedPal has reached its end-of-September target around 6p, or more precisely 6.1p, well ahead of schedule. An end-of-day close above 6.1p would put a move towards 10p on the agenda for late October or November. The technical backdrop remains positive while the shares stay above the former resistance and target level near 5.2p. Better trading updates would clearly help underpin that next leg higher.
- Prospex: Golden cross supports the next target: Prospex is another share that has reached an earlier target ahead of time, around 5.25p. The next upside objective is 10p by the end of next month. The recent 50-day and 200-day moving average cross, effectively a golden cross, supports the bullish setup. The upside remains valid while the shares stay above broken resistance at 4.75p.
- RC365: Rising channel and 50-day support: RC365 is bouncing from the floor of a sharply rising trend channel and appears to have regained a rising 50-day moving average. That is a strong technical combination. As long as the shares remain above the 50-day line around 2.4p to 2.45p, the top of the channel near 3.85p becomes the target for the end of next month.
- Serval: Bullish divergence after a decisive breakout: Serval has come back to life with a strong move through recent resistance, the 50-day moving average and the 200-day moving average. The shares have also broken above the old peak around 30p. Staying above 30p would increase the chances of a move towards 47p by the end of next month. The particularly interesting feature is bullish RSI divergence. Prices made lower lows towards the end of August, but the RSI made much higher lows. That improvement in momentum can be significant, and a golden cross may be the next development.
- Smarter Web: A technical setup despite the reservations: Smarter Web is not an obvious favourite fundamentally, but the chart is starting to look more interesting. The shares have bounced above a rising 50-day moving average near the lows and are now testing the 200-day line. A similar bounce in April did not end well, so there is a clear reason for caution. This time, though, the proximity to the 200-day average could signal a more meaningful trend change. While the shares remain above the rising 50-day line around 29p, the expectation is for a break above resistance from the start of the year near 36p, followed by a potential move to 48p by the end of next month. It is a punchy target, but that is what the chart setup suggests.
- The Works: A steady rising channel: The Works has a clean, slow-burn rising trend channel in place from February. The upper boundary is near 108p, which is the target for the end of next month. The trading stop is the rising 50-day moving average, currently around 81p. RSI behaviour is also encouraging, with repeated rebounds above the neutral 50 level since April. That persistent momentum support echoes the wider bullish chart structure.
- The Mission Group: A quiet chart with improving structure: The Mission Group is not a heavily followed chart, but it is showing a rising trend channel. The upper boundary is near 35p, providing the target for the end of next month. The shares need to stay above recent resistance around 19p and above the now-rising 50-day moving average. It would be particularly constructive if the 200-day moving average, currently just below, begins to rise as well.
- United Oil & Gas: Bear-trap rebound despite funding concerns: United Oil & Gas has taken a long time to deliver, but the current bear-trap rebound looks healthy. The 50-day moving average is rising and the main resistance level is around 0.22p. Frequent fundraisings remain the obvious issue for the shares. Even so, while recent support around 0.17p holds, a move towards 0.29p to 0.30p by the end of next month remains the technical objective.
- World Chess: Support above the rising 50-day average: World Chess is improving after its constructive setup at the end of last week. The shares are finding support above a rising 50-day moving average, which sits around 0.33p to 0.34p. The next challenge is the 200-day moving average near 0.44p. A break through that level would support a move towards 0.62p by the end of next month.
What Matters Most From Here
The strongest charts are generally the ones doing three things at once: holding above rising moving averages, maintaining support above former resistance, and seeing the RSI stay above or rebound from 50.
For the wider market, the FTSE 100’s position above 10,726 remains important, while the DAX needs to resolve its uncertainty around 26,000. In crypto, Bitcoin remains a range trade until proven otherwise, whereas Ethereum has the more convincing upside consolidation pattern.
Among the individual shares, the important discipline is not to chase every sharp move. Focus on the stated support levels and whether each chart can hold its breakout. That is what separates a promising technical setup from a failed one.
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.
