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, ADM, ActiveOps, CT Automotive, First Class, Invinity, Kooth, Vulcan Two, The Works, and Zinc Media.
There are days when the charts look messy, indecisive and not worth the effort. This is not one of those days. Across the major indices, crypto, commodities, and a handful of UK small caps, some very workable setups are emerging. A few of them are even starting to look punchy.
The big macro shadow over everything remains the Iran situation, and crude oil is still the market of the moment. But if that risk cools, there is room for equities to push on, and several stocks are already behaving as though they want to move before the headlines catch up.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: a possible buy opportunity at last
The FTSE 100 is starting to improve technically, and although tempting fate is never ideal, this does look like a market that may finally be offering a buy opportunity.
The key positives are straightforward:
- The 50-day moving average is rising.
- The RSI is above 50, which keeps momentum on the constructive side.
- The 200-day moving average is already rising.
- Price has broken above resistance from last month around 10,320.
With the market now above that resistance area and above the 50-day line near 10,330, the first target is a move towards 10,500. That looks like the realistic near-term upside.
If the geopolitical backdrop improves sharply, particularly if tensions in Iran ease and oil calms down, then there is scope for something closer to 10,840 by the end of next month, possibly sooner.
On the downside, if the setup fails and the chart breaks down, support remains around the floor of the channel from October near 10,200, just below the 50-day line. That level has already proved itself as decent support since the end of last month.
DAX: edging towards 25,000, with more to come if resistance gives way
The DAX continues to make progress within a rising channel. As ever with channels, there is a slightly artistic element in drawing them, but the broad message is clear enough: the trend remains upward.
The index is now heading towards the 25,000 area. There is likely to be resistance just above that level, and it probably needs to break cleanly before the market is really off to the races.
If that happens, the next major upside reference becomes the June 2025 resistance line projection around 26,200. That is the target to keep in mind for the end of next month, as long as the DAX remains above the 200-day moving average at 24,100.
Dow: an extended bull flag points higher
The Dow remains in what looks like an extended bull flag, essentially a mid-move consolidation rather than a reversal. The market closed beautifully around 50,000, and that keeps the bullish interpretation very much alive.
Momentum is still behaving properly:
- Recent RSI action has stayed above neutral 50.
- There has been another RSI 50-plus rebound.
- The 50-day and 200-day moving averages are both rising strongly.
The target here is the projected November resistance around 53,000 by the end of next month. It may not be the most outrageous call in percentage terms, but the chart itself is doing the heavy lifting.
Worst case, the Dow may need to revisit the 50-day moving average at 48,100 before pushing on. Even that would still sit within a healthy bullish structure.
Bitcoin: bounce above the 50-day line is a solid signal
Bitcoin has delivered a technically encouraging move by bouncing off, and more importantly back above, the rising 50-day moving average. That tends to be a stronger buy signal than simply holding support.
On that basis, the near-term target becomes the 200-day moving average around 81,000 over the next couple of weeks.
If Bitcoin falls back below the 50-day line at roughly 76,224, then there is a risk of a move towards the floor of the channel near 70,000. Even so, that may be too bearish a reading now. Given the strength of the bounce, a retreat into the 74,000 to 75,000 area looks more like the limit on the downside.
Ethereum: still lagging
Ethereum has been noticeably weaker than Bitcoin. That relative underperformance stands out because while Bitcoin has reclaimed its 50-day line, Ethereum has dropped below its own, near 2,262, and slipped to the floor of its channel around 2,100.
That 2,100 area is the key support. As long as it holds, there is still hope for a bounce back towards the 50-day moving average at 2,262. But at the moment, Ethereum is clearly the weaker chart of the two.
Gold: not broken, but not inspiring either
Gold has been disappointing, although not as disappointing as it might have been. The market has managed to avoid a full retest of the 200-day moving average around 4,366, and that remains the level for bargain hunters looking for a limit order entry.
For the chart to improve, gold really needs to regain the October uptrend line near 4,570. If it can do that, the initial upside target becomes the 50-day moving average at 4,679.
Until then, it remains a market that is merely holding together rather than one showing real leadership.
WTI crude oil: the market of the moment
Crude oil is still driving sentiment elsewhere, and this is the chart that matters most in the short term.
There have been multiple failures at the resistance line from April, now roughly 104.80. While the price remains below that level, the risk stays tilted towards a move down to the May support area around, or just below, $90.
For those who are still bullish but want confirmation, the key near-term battleground is the 50-day moving average at 98.15. If oil closes back above that and then pushes through 104.80 on an end-of-day basis, the next upside resistance is around 110.
In other words:
- Below 104.80: downside risk remains alive.
- Above 98.15 and especially above 104.80 on a close: the bulls regain control.
Small – Caps
ADM Energy: highly speculative, but a breakout could carry: ADM Energy is not exactly a widows-and-orphans stock. Historically it has been a bit of a beast, and the price action is still fairly wild. But there is a setup here. Resistance from February comes in around 0.032p. A break above that opens the way to the top of the old February range near 0.040p, with best-case upside to the 200-day moving average at 0.046p by the end of next month. For the bullish case to remain valid, the shares need to stay above the 50-day moving average at 0.027p.
ActiveOps: one of the better-looking charts on the list: ActiveOps has both a great name and a great chart. The technical picture is nicely constructive: A golden cross looks to be only two or three weeks away. The shares are above recent resistance near 226p. The stock also gapped through the 50-day moving average, which adds to the bullish tone. The next target is the top of the range and the upper boundary of the rising trend channel from this time last year, as high as 310p by the end of next month.
CT Automotive: breakout from a falling channel: CT Automotive has broken out of a falling trend channel and cleared the 34p breakout level. That suggests a move towards the top of the triangle from this time last year, with a target as high as 54p by the end of next month. The ideal condition now is simple enough: stay above the 200-day moving average around 30p.
Cellbxhealth: a classic sideways shuffle above a rising 50-day line: This is one that has had perhaps more coverage than it deserved so far, but there is a reason for sticking with it. The chart has what can best be described as a U-shaped bull flag, and those can resolve sharply higher. The trigger level is an end-of-day close through 1.35p. That would target 1.6p next month or even sooner. The more ambitious case comes if resistance gives way quickly over the next few days. In that scenario, 2p becomes a best-case target by the end of next month.
First Class Metals: breakout building on earlier strength: First Class has already rewarded attention over the past few days, having risen from around the 2.1p to 2.2p area. The chart now points to the top of the range around 3.0p to 3.1p, but there may be room for more than that. With the 50-day moving average rising sharply, a broader bullish pattern appears to be taking shape, effectively a broadening triangle that has been developing since roughly this time last year. That gives a best-case target of around 3.75p by the end of next month. Ideally, the shares now hold above recently broken resistance at 2.3p.
Invinity Energy: strong breakout now backed by newsflow: Invinity has had the RNS of the day, but the chart was already doing the right thing. The key breakout level was around 20p, and once that went, the shares moved as expected. The first target is the top of the channel around 31p. Above that, the next objective is the upper parallel of the rising trend channel from the early part of last year, near 43p, potentially by the end of next month. The important line in the sand now is the broken resistance from last summer around 29p to 30p. Staying above that would keep the bullish structure intact.
Kooth: quiet chart, but a decent turn underway: Kooth is not a stock that gets much attention, but the chart has turned up nicely. The shares have broken recent resistance around 145p, and that opens the way to 190p. At the current pace, that target could be achieved by the end of this month rather than next month. The move looks as though it is being driven by something positive under the surface, even if the company newsflow has not been especially dramatic recently.
Vulcan Two: online pharmacy story with a strong technical base: Vulcan Two, the online pharmacy company, is another interesting one. The chart has had a familiar look: a sideways shuffle against a rising 50-day moving average. That tends to be a useful precursor for a stronger move. The initial target is at least 277p over the next couple of weeks. There is also an RSI uptrend line supporting the bullish argument. If the shares reach 277p, the next target becomes the upper parallel of the triangle pattern, heading towards the 330p area by the end of next month as a best-case scenario.
The Works: gap higher suggests the move is not finished: The Works is doing exactly what stronger charts tend to do. The shares have gapped higher, already reached the initial target of 57p, and still look capable of extending further. The next target is the upper parallel of the rising trend channel from September, which points to as high as 75p by the end of next month, possibly sooner. That combination often points to a move that can run further than people expect.
Zinc Media: contract win finally sparks upside: Zinc Media has finally had the sort of announcement the market can get behind, with a sizeable commission tied to a Middle Eastern entertainment TV series reportedly worth $6 million. The chart response has been encouraging. As long as the shares remain above recent broken resistance around 45p, the initial target is 55p. After a period of frustration, it is good to see the stock at last moving in the right direction.
What matters most here
If there is a common thread running through these charts, it is this: the stronger names are showing the same handful of behaviours.
- Rising 50-day and 200-day moving averages
- RSI holding above 50 or rebounding from that level
- Breakouts through recent resistance
- Sideways consolidations above rising trend support
- Gaps higher that hold rather than fade
That is true for the indices, for several of the better small-cap setups, and to a degree for Bitcoin as well. The exceptions are worth noting too: Ethereum remains weaker than Bitcoin, and gold still needs to prove itself.
Above all, keep one eye on oil. If crude stays heavy and geopolitical pressure eases, risk assets have room to breathe. If oil pushes through resistance again, it will complicate the picture everywhere else.
For now, though, there are enough constructive patterns on the board to justify a bullish bias, provided the key support levels keep holding.
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.
