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, Cindrigo, Critical Mineral, Cornish Tin, Ethernity, Halo, Imaging Biometrics, Panther, RentGuarantor, Rockfire, Smarter Web, Sovereign Metals.
October has arrived with the FTSE 100 testing a line that matters: its 200-day moving average. The DAX and Dow are showing similar signs of weakness, but the picture is less uniform elsewhere. Bitcoin and Ethereum are holding above important former resistance, crude oil has bounced from its 50-day line, and several smaller shares are pressing against breakout levels.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Stock indices: the 200-day lines come into focus
FTSE 100: 10,450 is the immediate test
The FTSE 100 is virtually on its 200-day moving average at around 10,450. An end-of-day close below that level would put the May to June support area near 10,150 in view. With the Budget approaching, a move down to that area is not difficult to imagine, although the close below 10,450 is the first thing to establish.
The warning signs appeared before the latest decline. For several sessions, the index could not even reach its 50-day moving average at the daily high. A couple of attempted recoveries came to little, and the July resistance line around 10,780 remained intact. While the FTSE stays below former September support at 10,580, 10,150 remains the downside level to watch.
The relative strength index, or RSI, is around 31. That is weak, but not quite oversold, leaving scope for another day or two of downside. RSI measures the speed and size of recent price moves; Fidelity’s guide to the indicator provides a useful explanation of how its levels are commonly read.
DAX: back above 25,200 would delay the rollover
The DAX tried to hold the floor of its rising trend channel near 25,400, but has slipped below it and approached its 200-day moving average around 24,800. A break beneath that average would raise the risk of a move towards June to July support at roughly 24,500.
There is a clear level on the other side of the argument, too. A close back above the gap around 25,200 would delay the potential rollover. Earlier failures around the neutral RSI 50 level had already warned that the upward momentum was struggling.
Dow: repeated momentum failures
The Dow makes that RSI warning particularly plain. There have been three clear failures below the neutral 50 level, alongside a break from the rising trend channel in place since April. The obvious chart destination is now the 200-day moving average near 50,200.
A spread-betting quote checked during the session stood around 50,800, somewhat higher than that chart level. Anyone trading the spread would need to check the live quote and its relationship to the underlying index rather than assume the two prices are directly interchangeable.
Crypto: former resistance is doing the work
Bitcoin
Bitcoin has stalled close to its old resistance area, but 82,000 is now the key support level. While it holds above that mark, the chart leaves room for a move towards 95,000 by the end of next month, around the top of the rising trend channel drawn from February.
Below 82,000, the more likely test is the 50-day moving average near 77,600. That gives the setup a straightforward dividing line: former resistance holds as support, or the moving average comes back into play.
Ethereum
Ethereum has bounced above its former resistance area around 2,580. Holding above it keeps the top of the February rising channel near 2,980 in sight. A stronger run could take it as high as 3,400 by the end of next month.
If that bounce gives way, the preferred support area is the 50-day moving average around 2,452.
Commodities: gold weakens while crude holds support
Gold
Gold was having a difficult time even before equities fell. In fact, it slipped out of its rising channel a couple of days ahead of the equity-market channel breaks. That makes its failure to hold the former support area especially disappointing.
Old support near 4,230 is now acting as resistance. While gold remains below it, the chart points towards 4,000 as the downside risk.
Crude oil
Crude has produced the opposite sort of signal: repeated bounces from its 50-day moving average, currently around $88.41. While that line holds, the next area to look for is recent resistance at the floor of the gap near $97.
A break below the 50-day line would change the setup. In that case, the floor of the channel and the 200-day moving average around $83 become the favoured destination.
Smaller-Cap Shares to Watch
With the broader market under pressure, there are fewer convincing stock charts than usual. Even so, several names have specific levels worth keeping on the radar.
- Cindrigo: three strong candles at the wedge boundary: Cindrigo looks as though it may have the energy to break out of a falling wedge. The boundary is around 2.65p; a break above it would bring resistance from the decline, near 4p, into view. That is an ambitious target for the end of next month, not an automatic consequence of touching the line. A cautious approach would be to wait for another convincing close above wedge resistance. The interesting detail is the candle pattern: for three days, the shares have opened near the low and closed near the high. That suggests buying interest, although it does not establish what is driving it.
- Cornish Metals: a push through 104p: Cornish Metals has spent time broadly between £1 and £1.15 to £1.20. The immediate hurdle is recent resistance around 104p. A decisive push through it would open the way towards the top of the rising trend channel near 116p, potentially by the end of next month or sooner.
- Ethernity: the earlier moving-average target has been overtaken: Ethernity is a reminder of how quickly a tiny company’s chart can change. Its market capitalisation had previously been around £100,000 and was now roughly £500,000. The earlier best-case target at the 200-day moving average has been passed decisively. The next chart level is around 0.0062, potentially in the coming days. That does not rule out a fade afterwards. It has nevertheless been one of the stronger recent chart calls, and the move deserves its lap of honour.
- Halo: can it hold the latest low?: Halo issued an RNS saying it knew of no reason for the fall in its shares. The price had been down around 6% to 7% before bouncing from an initial low near 7.15p. If it can stay above that latest low, just over 7p, a return towards recent resistance around 9p would be a reasonable recovery level to watch. The drop has the feel of a sudden rug pull, but the company’s statement offers no confirmed explanation for it. The price action, rather than a guessed cause, is the thing to follow.
- Imaging Biometrics: the close above 1.2p matters: Imaging Biometrics has had a decent update and has gapped higher for a second time. Despite its market capitalisation already being around £2 million, the chart still offers a clear trigger: an end-of-day close above 1.2p. If that arrives, old 2025 resistance as high as 2p becomes the next target, perhaps by the end of November. For now, the gap is encouraging, but the close through 1.2p is the confirmation to look for.
- Panther Metals: £2.16 first, then a possible £3: Panther Metals is nearing £2. I was once told the shares could be worth £20, so there is only another £18 to go on that particular claim. On the chart, the nearer and more useful levels are the top of the channel around £2.16, followed by a resistance line that could point towards £3 by year-end. Ideally, the shares remain above the 50-day moving average around 142p. Better still would be continued support above recently broken resistance near 165p.
- RentGuarantor: the rising channel remains intact: RentGuarantor’s shares are soaring like a homesick angel. Last month’s gap higher briefly looked vulnerable, but the rally has continued. The top of the rising channel drawn from June is around 135p, and that remains the target while the shares hold above recently broken resistance at 97p.
- Rockfire: an improving chart, with a financing caveat: Rockfire continues to provide updates from Greece, and the chart is looking a little better. Recent candles have been relatively clear or neutral, while the 50-day moving average has begun to rise. That suggests scope for at least 0.14p, subject to any fundraising developments. A move through 0.14p would put the top of the broadening triangle from April in play, as high as 0.2p. That is the best-case chart target for year-end.
- Smarter Web: one target remains: Smarter Web has already reached a string of levels that once looked rather ambitious: 37p, then 50p, and finally 74p. The remaining chart target is 85p by the end of October, provided the shares stay on the right side of 70p.
- Sovereign Metals: a wedge breakout to confirm: Sovereign Metals rounds things off after one of the most impressive company presentations I have attended in nearly 30 years. The chart appears to be breaking out of a wedge around 27p. An end-of-day close above that level would point towards 33p by the end of October, a target that looks relatively modest if the breakout holds. The company issued its annual report at the end of last month, and its connection to the wider push for secure commodity supplies gives the story potential drivers beyond the chart. The immediate technical question, though, remains simple: can the shares close above 27p?
Across these markets, the distinction is between approaching a level and confirming a move through it. The FTSE 100’s close around 10,450, Bitcoin’s hold above 82,000, and the closing prices at Cindrigo, Imaging Biometrics and Sovereign Metals will tell us more than an intraday touch alone.
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.
