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, Arrow, Conroy, Eden, ECR, hVIVO, Oriole, OPG, Phoenix, Reabold, T42, Victoria.
A handful of major indices have found technical support and registered RSI bounces, while gold continues to shine and a selection of small caps are showing fresh breakouts and bullish divergence. Below is a concise, chart-led run through the markets and specific stocks to watch, with key levels and likely near term targets.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major indices snapshot
Price action across the FTSE 100, DAX and Dow shows a market that would like to rally, but needs follow through. Watch the 50 day and 200 day moving averages and the RSI 50 level for confirmation.
FTSE 100
- Support is holding at the old resistance area, around 9,770.
- There have been multiple RSI rebounds at the 50 level, which favors upside momentum.
- Short term target is the channel top near 10,000, with the channel ceiling at about 10,100.
- Key technical guardrail is the 50 day moving average near 9,644. Stay above that for the bullish case.
- Macro risk to monitor, notably the Bank of England and rate cut expectations, could change the path.
DAX
- Price is testing the 50 day line with a small RSI kink suggesting a possible rebound.
- Downside risk runs to the 200 day moving average near 23,500.
- If the rebound holds, a return toward the year highs around 24,700 is plausible by the end of next month.
Dow Jones
- Recently missed the February channel top near 49,000.
- Support and risk area sits at the 50 day moving average near 47,160.
- Two prior RSI 50 rebounds suggest the market is trying to mount another attack on the highs. A finish near 49,000 around the turn of the year is the scenario to watch.
Above 9,770 on an end of day closed basis, look for an imminent 10,000 target.
Crypto: Bitcoin and Ethereum
Cryptocurrencies remain more vulnerable than equities. Key resistance and the behaviour of the 50 day moving average will determine whether a fresh leg higher is possible.
Bitcoin
- Immediate resistance sits around 91,000. An end of day close above this level would open a move to the 50 day area near 94,000.
- Failing that, downside targets include the mid to low 80,000 area and lower channel support. The path remains fragile until a decisive close above 91,000.
Ethereum
- Recently retested the April uptrend near about 2,800.
- Clearance above that level gives a shot at the 50 day moving average near 3,177.
- If momentum does not return, a retest of November support near 2,622 is not out of the question given the RSI remains below neutral.
Gold
Gold continues to be the standout performer and remains technically constructive.
- Recently cleared resistance around 4,260 to 4,270.
- Projection points toward the November 2024 resistance near 4,660, possibly as soon as the end of next month.
- Support to watch is the trendline near 4,170 and the 50 day moving average around 4,133. The fact that price has retraced from record levels while remaining above the 50 day is a bullish indicator.
Small-Cap watch list:
Below are the smaller names that show clear chart set ups. Each entry highlights the technical trigger levels, upside targets and what would hurt the bullish case.
Arrow
- Share price has lagged fundamentals and recently gapped higher.
- Immediate resistance near 12.25 pence. Clear that on an end of day close and a move to roughly 14.88 to 15 pence becomes possible by the end of next month.
- Failure back below the rising 50 day, around 11.73 pence, would undermine the setup.
Conroy
- Up about 10 percent and heading toward the top of the rising trend channel from May.
- Target the channel top around 16 pence while staying above the 50 day near 10.37 pence.
Eden
- Cleared a May resistance line near 2.55 pence.
- With RSI settled above neutral, look for a run toward the 200 day moving average near 3 pence by the end of next month.
- Important support is the 50 day around 2.38 pence.
ECR Minerals
- Brooke recent resistance in the low twenties, crossing above about 0.24 pence on the chart.
- Next range top sits in the low thirties. The rising 50 day and an RSI uptrend since June are constructive.
- Watch for a potential golden cross if the 200 day continues to rise. A funding raise remains the main haircut to the bull case.
hVIVO
- Looks to be back in business from a chart perspective. The 50 day is rising.
- Broken resistance from June around 6.6 pence. A move to the 200 day near 10.75 pence is the next medium term target, while staying above the 50 day around 6.4 pence.
Oriole
- Strong rebound off the channel floor near 0.26 pence, and the RSI has staged a double bounce around neutral.
- With the 200 day rising, expect a measured move, possibly into the low to mid forties over time, provided support at 0.26 pence holds.
OPG Power
- Attempting a breakout from a falling wedge after becoming oversold.
- Crossed the 50 day around 5.6 pence. A gap fill up to approximately 7 pence is possible, as long as October support near 5.3 pence remains intact.
Phoenix
- Director buying has helped. The chart shows bullish divergence.
- Breaking the psychological 2 pence level on an end of day close would open a path to about 2.5 pence and potentially toward 2.9 pence if momentum continues.
Reabold
- Price flat while the RSI is rising, which is a positive divergence.
- Target near 0.58 pence if the shares can close above the 50 day around 0.45 pence.
t42 IoT
- Broken out of a long wedge and cleared both the 50 and 200 day moving averages in a strong move.
- 50 day is already rising. Next resistance to watch is the August peak near 2.8 pence.
Techmar
- Shares hit the prior target at 10 pence, with a slight overshoot.
- An end of day close above 10 pence would provide a fresh leg to the upside, with targets around 13 to 15 pence if contract wins continue to arrive.
Victoria
- Forming a falling wedge with bullish divergence as the RSI printed a higher low while price made a lower low.
- Short term resistance sits in the 40s with larger medium term resistance nearer the 60s. Keep an eye on the broken resistance near 38 pence as support on any pullback.
How to use these levels
Technical trading is about probabilities and disciplined execution. For each idea above, the following checklist helps manage risk and improve decision making.
- Use end of day closes to confirm breakouts and breakdowns rather than intraday noise.
- Keep stop loss levels near the moving average support mentioned, for example the 50 day or recent structural support.
- Position sizing should reflect the distance from entry to the stop. Smaller floats and news sensitive names warrant smaller sizing.
- Monitor macro events, especially central bank moves, which can suddenly alter market risk appetite.
The overall tone across markets is cautiously constructive for equities and gold, while crypto needs decisive closes above resistance to confirm recovery. Several small caps offer clear risk reward setups, but funding events and news can quickly change technicals. Keep these levels bookmarked and wait for confirmation before committing capital.
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.
