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, Ethereum, Gold, WTI Crude Oil, CAP-XX, CloudCoCo, Distil, European Metals, EnSilica, Iofina, Mercantile Ports, Mycelx, Ondine, Premier African, Rome Resources, Scancell, Theracryf, Vault.
The broad market tone is still constructive, but it is one of those periods where levels matter more than ever. A lot of these charts are sitting right on key moving averages, trend channels or breakout points. That means there is opportunity, but it also means discipline is essential.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
The standout theme at the moment is that several major indices are trying to push higher despite a stubbornly firm oil price, while crypto remains more mixed and selective. In small caps, there are a number of technically interesting breakouts, a few strong continuation setups, and the usual handful of names where volatility comes with the territory.
FTSE 100
The FTSE 100 is looking rather stronger than many might have expected given how elevated the oil price remains. The immediate hurdle is the 50-day moving average at 10,338, and that level has already proved itself as resistance in recent sessions.
If you are bearish, this is exactly the sort of area where you would be tempted to make your stand, around 10,360 to 10,380. But the bigger picture changes if the index can manage an end-of-day close above the 50-day line. In that case, the first upside target becomes the early May resistance near 10,500.
Further out, the more ambitious target is 10,680, which lines up with the April resistance zone. That is probably a target for the end of next month rather than something immediate, and it likely depends on geopolitical tensions easing, particularly around Iran.
On the downside, the key support area is the floor of the current channel at 10,190. For now, that is the near-term low area expected to hold.
DAX
The DAX has had a rocky ride, but it currently looks as though it is resolving higher. Price action has bounced from an uptrend line drawn from mid-March, which comes in around the same area as the 200-day moving average at 24,100.
As long as the market stays above that region, the path looks open for a return to the May peaks around 25,200. The RSI in the mid-50s is constructive and leaves room for further gains.
If the market gets hit with a rug pull, the most likely downside support is the 50-day moving average near 23,700, roughly in line with the sort of weakness seen in the latter part of April.
Dow
The Dow is also holding an uptrend line from March, currently around 49,400. While that support remains intact, the focus is on clearing the rather sticky 50,000 zone.
If that gives way properly, there is room for a move up towards 52,800, based on a projection from the November resistance line.
Should there be a setback, the preferred assumption is that the market holds above the recent lows at 48,700. In a more aggressive sell-off, the 50-day moving average at 47,900 would be the lower boundary to watch.
Crypto: Bitcoin hanging in, Ethereum looking weaker
Bitcoin
Bitcoin is not yet delivering the sort of technical confirmation bulls would want. The 200-day moving average at 82,000 has so far blocked progress, and price has not even managed to tag it intraday. It also means Bitcoin has not reached the top of the rising trend channel that has been in place since February.
That leaves the market in a waiting game. A break above the 200-day line would improve the picture materially and would bring 91,000 into view, which was prior resistance on the way down.
On the downside, the ideal scenario is that Bitcoin stays above 79,000. Under that, the initial May support sits at 77,000. If things turn ugly, then the 50-day moving average at 74,700 becomes the rug-pull level and perhaps the area where dip buyers start to reappear if they still believe the recovery has legs.
Ethereum
Ethereum looks less convincing. It failed to get to the 200-day moving average and also fell short of the top of its February rising channel. More importantly, the RSI has dropped well below the neutral 50 level, which shifts the bias lower.
The immediate risk is a break of the 50-day moving average at 2,246, followed by a move towards the floor of the price channel near 2,019.
On the upside, 2,400 now looks like a lid on the market. Optimists may still point to the top of the channel around 2,580, but right now the chart is suggesting that the more likely next move is a break lower through the 50-day line rather than an immediate upside breakout.
Commodities: gold leaning on support, oil still grinding higher
Gold
Gold continues to respect the 50-day moving average, and that has become the key technical feature of recent price action. The line comes in at 4,742, and the market has repeatedly treated it as an important reference point.
If gold does break below that moving average, the next downside area to watch is the uptrend line from late October at 4,570.
WTI crude oil
Crude is still grinding away near the $100 level. The $99 area has become an important pivot, acting as potential support after previously serving as resistance on the way up.
As long as oil stays above that level, there is still scope for a move to $110. Below, the lower end of the current channel comes in around $95, which sits just under the 50-day moving average at $96.68.
For the moment, the most sensible working range is $95 to $105, with a bullish bias above $99. If the geopolitical backdrop worsens significantly, the more aggressive bullish targets come into play, with the top of the rising trend channel from January pointing as high as $135 to $140 over the summer. That sort of move, however, would likely require severe disruption in the Middle East.
Small – Caps
CAP-XX: CAP-XX has broken through the top of a falling wedge, which is often a positive reversal pattern. The initial target is the 200-day moving average and recent resistance near 0.28p, ideally later this month. Above roughly the 30p area, the bigger upside target opens out towards 0.35p to 0.37p by the end of next month. An unfilled gap to the upside has helped get this move going, which is another positive technical feature.
CloudCoCo: CloudCoCo, silly name or not, is attempting a recovery. There appears to be a rising trend channel in place from January, and if that remains valid, the top of the channel points towards 0.37p by the end of next month. The condition for that bullish setup is that the shares stay above the 50-day moving average at 0.19p.
Distil: Distil is not a chart that gets many mentions, which may tell its own story, but there is at least a technical argument for a bounce. The shares look to be holding a rising trend channel base, and while they remain above the mid-April peak around 0.04p, there is scope for a move up to the 50-day moving average just under 0.06p.
European Metals: European Metals looks stronger. The chart has delivered a breakout above a rising 50-day line and the floor of the channel, backed by an RSI rebound through 50. That combination suggests a move towards the top of the channel at 23p to 24p by the end of next month, provided the shares stay above the 50-day moving average at 15p.
EnSilica: EnSilica has been one of the more satisfying charts, especially after a positive company interview when the shares were still in the low 60s. The stock has since doubled and broken through one of the earlier targets at 94p. The next target is now 135p. This is exactly the sort of setup where a well-timed chart view and a supportive company narrative have lined up properly.
Iofina: Iofina remains in breakout mode. The shares have already met the first target at 40p and the second at 46p. The new objective is 62p by the end of next month, while the chart stays on the right side of 40p support.
Mercantile Ports: Mercantile Ports has probably overdelivered on the upside already, but there may still be more to come if it can break the resistance line around 1.15p. Above that, the chart points towards 2.44p over the coming weeks. This is, however, a very volatile and flaky situation. It is not one for conservative money.
Mycelx: Mycelx is making very decent progress and the chart structure is notably strong. The step-by-step progression has been impressive, and the current setup points towards 80p by the end of next month. At the current pace, that target could even come into play by the end of this month. The key assumption is that the shares now hold above the low 50s on any near-term wobble.
Ondine: Ondine is consolidating in what looks like a neat bull flag around the 14p to 15p area. From here, the chart suggests a move to the top of the range and top of the triangle around 18.5p. Ideally, the stock remains above 14p while that pattern develops.
Premier African Minerals: Premier African had looked attractive technically, fund raises permitting, and in fairness that assessment held up even though the company then delivered funding news. The current setup is improving again. The shares are bouncing above a rising 50-day moving average and have also delivered an RSI 50 rebound. That gives scope for a move towards at least the 0.33p area over the next couple of weeks, as long as the stock stays above the 50-day average just over 0.01p.
Rome Resources: Rome Resources seems to be everywhere, with interviews arriving thick and fast, but the important point is that the chart is finally starting to work. There is growing belief that the company could hit something significant in the DRC, and that shift in sentiment is beginning to show in the price action. Above the old October resistance at 0.38p, the chart points towards 0.62p to 0.63p by the end of next month, and potentially sooner.
Scancell: Scancell is responding well. The shares are now working towards a third target at 27p to 28p by the end of next month. Looking left on the chart, that area corresponds with the old 2023 resistance, which adds relevance to the target. Ideally, the shares now stay above 20p.
Theracryf: Theracryf has gapped to the upside and is making solid progress within a rising trend structure. While the shares stay above the floor of the gap at 0.22p, the setup favours a move towards the top of the range and channel near 0.33p by the end of this month.
Vault Ventures: Vault Ventures is an interesting speculative chart, especially after appearing on X. It looks as though there may be a rising trend channel base in place, and the shares are above both the 50-day and 200-day moving averages around 1.1p. That opens the door to a best-case scenario of 2p plus by the end of next month. More cautious traders may prefer to wait for a break above the March resistance at 1.35p before assuming that target is in play.
What matters most from here
The common thread across these charts is fairly clear:
- Indices are constructive while key moving averages and rising trend lines hold.
- Bitcoin needs to clear the 200-day average to improve decisively.
- Ethereum looks more vulnerable and is in danger of losing its 50-day support.
- Gold remains heavily influenced by its 50-day moving average.
- Oil is still biased higher above $99, with geopolitical risk capable of accelerating the move.
- Small caps are offering the most interesting chart setups, but many of them come with higher volatility and lower margin for error.
Right now, this is a market for respecting levels. Breakouts are working in places, but plenty of charts are still only one support failure away from looking quite different. That makes the next few sessions especially important across the board.
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.
