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, Alkemy Capital, Empire Metals, Funding Circle, Foxtons Group, B HODL, Intercede Group, Jersey Oil and Gas, Litigation Capital, Northern Bear, Ocado Group, Ondo InsurTech, Somero Enterprises, Neoterra Group
The FTSE 100 remains trapped in a very tight mini range, while the DAX, Dow, cryptocurrencies, gold and crude oil each present very different technical pictures. In UK smaller companies, there are some encouraging breakouts, a few potential gap-fill buying opportunities, and at least one chart that still looks distinctly painful.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: Higher Lows Keep the Bullish Case Alive
The FTSE 100 has settled into a narrow range between roughly 10,450 and 10,550. With the RSI sitting just below the neutral 50 level, there is not much momentum guidance from that indicator alone.
The more useful detail is price action around the 50-day moving average. Recent intraday lows have repeatedly held above the rising 50-day line, currently near 10,426. That is often an encouraging leading signal, particularly when a market is consolidating before a potential move higher.
The key upside level is around 10,620, where the top of the falling trend channel from March comes into play. A decisive move through that area would be the first proper signal that the market is ready to break out of its current holding pattern.
For now, as long as there is no end-of-day close below the 50-day average, dips towards 10,426 remain buyable. There is also an uptrend support line from March near 10,400, so that region looks like the natural area for limit orders if the market weakens briefly.
DAX: A Gap Fill Could Create the Next Buying Opportunity
The DAX failed to hold the floor of its channel and is also struggling to remain above the 50-day moving average near 24,830. That leaves the index vulnerable to a retest of late-June support around 24,570.
The preferred scenario is a more limited decline into the unfilled gap around 24,700, followed by a recovery. For anyone not already in the market, the 24,770 area looks like a reasonable level to consider on the buy side.
- Potential buying area: 24,700 to 24,770
- Initial upside objective: 25,200
- More optimistic target: 25,463, the upper side of the gap
- Key downside risk: A retest of 24,570
Unless sentiment improves materially, there is probably little point in expecting much more than 25,200 on the first recovery attempt.
Dow: Exceptionally Strong RSI Behaviour Signals Potential Upside
The Dow remains in a narrow range, supported by an uptrend line from last month. The working range is around 52,000 on the downside and 53,300 at the top.
The standout technical feature is the RSI. It has repeatedly found support in the upper 50s for more than a month, an unusually strong pattern. For a technical analyst, that is not a trivial detail. It suggests that underlying momentum has remained notably resilient despite the sideways price action.
It is still an ambitious scenario, but this type of RSI strength can precede a more substantial break to the upside. For now, 53,300 remains the obvious range ceiling to monitor.
Bitcoin and Ethereum: Ethereum Still Looks the Better Chart
Bitcoin Struggles to Hold the 50-Day Line
Bitcoin has pushed through its 50-day moving average, helped by a strong candle earlier in the week, but the follow-through has been distinctly unenthusiastic. The market is now struggling around the 63,900 area.
An end-of-day close back below 63,900 could trigger a move towards interim support at 61,000. Below that, the March support-line projection near 57,000 comes into view, even if the market eventually recovers.
The overall impression remains one of a market that is saggy rather than energetic. A break above the 50-day line is useful, but it needs to hold if Bitcoin is to regain momentum.
Ethereum Has a More Constructive Setup
Ethereum continues to look marginally better than Bitcoin. While it remains above broken resistance at 1,840, there is scope for a move back towards the late-May support area near 1,975.
The RSI near 62 is also in a healthier position. That opens the possibility of a continued divergence between the two major cryptocurrencies, with Ethereum outperforming while Bitcoin remains stuck around its moving average.
Gold: Resistance Is Winning for Now
Gold has run into a substantial wall of resistance in the 4,060 to 4,070 area. The market has repeatedly struggled to push through that zone, making it the obvious breakout level for bulls.
For bears, the more immediate focus is a retreat towards 3,900, with the January support-line projection around 3,890 as a possible near-term downside target.
The RSI is the major problem for gold. It continues to fail in the mid to low 40s, which is a poor technical look. It is effectively the opposite of the Dow’s persistent RSI strength.
- Bullish trigger: A clear break above 4,060 to 4,070
- First downside area: 3,900
- Lower support projection: 3,890
Crude Oil: The Big Market of the Moment
Crude oil remains the most interesting major market. After a strong recovery, it has paused around the $78 area, which was resistance in June. That looks more like a mid-move consolidation than a meaningful reversal.
Above $78, the first objective is to fill the gap around $83. The best-case scenario would be a move towards the top of the falling trend channel near $86.
The RSI around 55 is in a constructive position and favours a move higher rather than lower. Oil previously overshot to the downside below $68 and through the February gap, so the current rebound still has room to develop if support holds.
Key Levels to Keep on the Radar
- FTSE 100: Buyable dips around 10,426 to 10,400, with 10,620 as the breakout level.
- DAX: Watch 24,700 to 24,770 for support and 25,200 for initial recovery resistance.
- Dow: The range remains 52,000 to 53,300, but the RSI action is unusually bullish.
- Bitcoin: 63,900 is the key 50-day moving-average level, with 61,000 and 57,000 beneath.
- Ethereum: Holding 1,840 keeps 1,975 in play.
- Gold: Needs to clear 4,060 to 4,070, otherwise 3,900 remains the likely retest area.
- Crude oil: Above $78, targets are $83 and potentially $86.
The broad picture is one of selective opportunity rather than a one-way market. Oil remains strong, the Dow has remarkable underlying momentum, Ethereum is holding up better than Bitcoin, and several UK shares are breaking through important resistance levels. At the same time, gold is struggling, Cardo remains deeply under pressure, and the DAX may still need one more dip before it can resume 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.
