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, Afentra, ASOS, Ampeak, Ethtry, Marechale, Mercantile, Microlise, Ocado, Orosur, Rank, Strategic Minerals, Sunda, Zoo Digital.
The market is looking a little tired in places, but there are still plenty of charts holding the right levels and setting up for higher targets. The key is not to get carried away with the upside where support is starting to creak.
Across the indices, crypto, commodities and smaller-company shares, the recurring theme is straightforward: hold the moving averages and recently broken resistance, and the recovery case remains alive. Lose those levels, and the downside targets come into play quickly.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Major Indices: FTSE 100, DAX and Dow
FTSE 100: 10,740 is the near-term level to watch
The FTSE 100 has slipped below 10,820, which was not really the preferred outcome. The market is now approaching an RSI uptrend line that has been in place since March, with the relative strength index near 54.
A sustained end-of-day close below 10,820 leaves 10,740 as the main near-term support level. That area was initial resistance in July. Below that sits the old April resistance near 10,700, although there is no immediate reason to expect a much deeper slide.
- Support: 10,740, then 10,700.
- Recovery trigger: An end-of-day close back above 10,820.
- Upside target: 11,000 and the top of the March rising trend channel.
For now, the index looks a touch weary. The 11,000 scenario is still possible, but the market needs to regain 10,820 first.
DAX: Solid support above 26,000
The DAX remains near the top of its rising trend channel from March. It is not quite trading cleanly either side of the channel boundary, which is unusual, but it remains above the important 26,000 support zone.
As long as 26,000 holds, the downside risk appears limited to around 25,600, the late-July resistance area. A push through 26,500 would be the more encouraging signal, opening the way towards 27,300 by the end of next month. That target comes from the upper parallel of the rising channel and a projected February resistance line.
Dow: 53,600 support keeps 55,000 alive
The Dow has softened after reaching the top of its rising channel from April at roughly 54,200. Even so, it remains above 53,600, which marks the top of the latest gap.
Holding above that gap top keeps the door open to 55,000 by the end of next month. A more likely short-term move may be a gap fill towards 53,200 before the next leg higher.
- Key support: 53,600.
- Possible gap-fill level: 53,200.
- Medium-term upside target: 55,000.
Crypto: Bitcoin is Heavy, Ethereum is Still Holding Up
Bitcoin: A decision point around the 50-day average
Bitcoin has spent much of the month going sideways around its 50-day moving average at 63,384. The candles look heavy, so a break beneath that average could bring early-July support at $61,000 into focus.
On the upside, Bitcoin needs to clear the descending resistance line from October, currently near $66,000, and then post-June resistance at $67,000. The best upside case currently is around $69,000, where the 200-day moving average sits.
- 50-day moving average: $63,384.
- Downside risk on a breakdown: $61,000.
- Resistance: $66,000 and $67,000.
- Best current upside target: $69,000.
The RSI is still trying to hold its uptrend line, although it is not doing so with much conviction.
Ethereum: The glass remains half full
Ethereum continues to consolidate above a rising 50-day moving average at $1,817. That is the line that matters. Holding above it keeps a move towards the 200-day average at $2,029 on the table later this month.
There have been two weak bounces, and the price action still looks as though it would like to test $1,817 first. But the RSI remains just above neutral 50, which keeps the balance marginally constructive.
In other words, the Ethereum glass remains half full rather than half empty, provided the rising 50-day line survives.
Gold and WTI Crude: Important Support Levels Come First
Gold: 4,360 must hold
Gold has backed away from the rising 200-day moving average around 4,451, which had been the target for the end of the month. The target is still valid while the metal holds above recent intraday support at 4,360.
Below 4,360, the concern would be that the August rally was a false dawn rather than the start of a more durable move higher.
WTI crude: Disappointing, but not finished
WTI crude has backed away after failing to challenge $85 properly this week. Below $85, the favoured destination is the 50-day moving average at $78.95. The worst-case technical level is the rising 200-day average at $76.95.
The RSI remains above neutral 50, so the upside gap towards $87 has not been completely ruled out. It is simply a disappointing day rather than a chart that has totally fallen apart.
- Resistance: $85.
- First downside target: $78.95.
- Deeper support: $76.95.
- Unfilled upside gap area: $87.
SPX Technologies: Holding Above $144.72 Is Crucial
SPX Technologies has attracted attention after strong momentum and a break above neckline resistance near $125. The important issue over the next 24 to 48 hours is whether the shares can remain above the 50-day moving average at $144.72 on an end-of-day closing basis.
If that level holds, the next major target is the 200-day moving average just below $157. The RSI has already produced a rebound above 50 and has held above 52.53, which supports the bullish reading.
There has been strong price action here. The key is not to lose the 50-day line.
UK Shares: Breakouts, Bear Traps and Recovery Trends
- Afentra: Above 69p, the 80p target remains in play: Afentra delivered a strong update and gapped through resistance, then held above the top of that gap at 69p. That is exactly the sort of price action worth respecting. Above 69p, the shares are looking for at least 80p by the end of the month. The chart is strengthened by both the 50-day and 200-day moving averages rising together. The longer the shares stay above 69p, the better the setup looks.
- ASOS: Dips towards 380p still look like buying opportunities: ASOS has been in recovery mode since the shares were bought lower down near 200p. The immediate issue is congestion around 400p. A break through that level should open the way towards 450p by the end of next month. The broader structure remains impressive, with a pattern of higher highs and higher lows all the way up. The shares have not touched the 50-day moving average since May, while the RSI uptrend line continues to support the recovery.
- Ampeak: Bear-trap rebound points towards 3.1p: Ampeak has broken above recent resistance at 2.66p. That breakout follows a bear-trap rebound from below 2.44p, a pattern that can often produce a sharper recovery than expected. Above 2.66p, the immediate target is the top of the falling trend channel at 3.1p, potentially by the end of the month or even sooner.
- Ethtry: 0.18p is the breakout level: Ethtry has bounced from the base of its rising trend channel around 0.16p. The key now is a move through the 50-day moving average at 0.18p. If the shares can clear that level, a move towards 0.30p by the end of next month becomes possible. The recently announced deal is worth examining, particularly given the current excitement around data centres. For the chart, however, the priority remains staying on the right side of 0.16p and breaking 0.18p.
- Marechale: 7p first, then a possible return to 9p: Marechale has broken recent resistance near 5.75p. That clears the way for at least 7p by the end of the month. The next stage would be a retest of 9p or higher by the end of next month. In the best case, the shares could reach 11p at the top of the rising trend channel that began around this time last year.
- Mercantile Ports: The V-shaped bull flag is working: Mercantile Ports has broken out of a V-shaped bull flag through 2.06p. Above that level, the shares are looking towards 2.4p, the top of the established range, by the end of the month or sooner. The technical picture is supported by an RSI rebound above 50, a bear-trap recovery below the rising 50-day moving average, and a rising 200-day moving average. The chart suggests MPL is on its way, provided it retains the breakout.
- Microlise: Strong candles point towards 55p: Microlise is one to keep on the radar. The rising 50-day moving average has helped lift the shares from the lows, and the candles have been strong, with opening prices near the lows and closes near the highs. While the shares stay above broken resistance around 43p, the target is the top of the rising channel at 55p by the end of the month.
- Ocado: A remarkable technical recovery: Ocado has delivered a textbook bear-trap rebound from below £1.50. The shares then broke the 200-day moving average around £2.08 and continued towards post-February resistance at £2.43. Above £2.43, the next major level is £3, with that target pencilled in for the end of next month. It is remarkable price action given the company’s fundamentals, but the chart has gapped through resistance and simply kept going.
- Orosur: A 17p break could be the turning point: Orosur is caught between a rising channel base and a falling trend channel. The decisive level is 17p, where the 50-day moving average and the top of the falling channel meet. A break through 17p would target the 200-day moving average at 21p, potentially by the end of the month. The RSI had already broken resistance around 38 earlier in the month, when the share price was near 14p, and it has since pushed through neutral 50.
- Rank: A more relaxed route towards 124p: Rank was expected to make a more explosive move, but the shares have taken the relaxed approach instead. They have broken the 104p resistance line at the top of the channel. An end-of-day close above 104p would point towards 124p by the end of next month. That target comes from a projected December resistance line.
- Strategic Minerals: Above 4.6p, the upside opens up: Strategic Minerals has broken a resistance line near 3.6p and moved above its 50-day moving average around 4p. Above the 50-day line, the minimum upside target is 5.8p. The best-case target is 7.75p by the end of next month, or potentially earlier. Ideally, the shares now remain above last month’s resistance at 4.6p. This remains a stock with a reputation for being a beast, and there is no reason to expect it to change its style.
- Sunda: A spike that needs confirmation: Sunda has produced a sharp spike higher. The problem is that rallies in this stock do not always last more than a day or two, so confirmation matters. If the shares can get above the 200-day moving average at 2.38p on an end-of-day closing basis, the chart points towards 3.4p at the top of the falling trend channel in the coming days.
- Zoo Digital: Bear-trap gap reversal targets 16p to 17p: Zoo Digital has broken above recent resistance around 13p after gapping higher in a bear-trap gap reversal. That move points towards 16p to 17p by the end of the month. The 17p target is based on the top of the range that has contained the shares for roughly the last year to year and a half.
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.
