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, Active Energy, Connecting, Deltic, DeFi, EnSilica, First Development, Inspiration, Kistos, Ondine, Pantheon, Predator, and Star.
Here is the current technical picture across the major indices, Bitcoin, Ethereum, gold, crude oil, and a run of small-cap stocks that are beginning to stir.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: flirting with danger at the floor of the rising channel
The FTSE 100 has disappointed at a key resistance area around 10,650. It never quite got there, and that failure matters because it had the look of a potential signal for a retest of the highs. Given where oil is and the ongoing geopolitical mess in the Middle East, that strength always looked a little odd anyway.
Now the focus shifts to the floor of the rising trend channel at 10,360. That level sits near the 50-day moving average at 10,424, which might otherwise have been an intraday entry point. The trouble is that the setup no longer looks especially attractive on the buy side.
The reason is momentum. The RSI has slipped below the neutral 50 level, and that weakens the case for treating a test of the 50-day line as a straightforward dip-buying opportunity.
If the FTSE breaks 10,360, the market enters what can only be described as brace-position territory. Below there, the door opens to a retest of last month’s support around 9,700, with the 200-day moving average at 9,781 also looming as a likely magnet.
Key FTSE 100 levels:
- Resistance: 10,650
- Near-term support: 10,424 then 10,360
- Major downside risk: 9,700 and 9,781
DAX: still under pressure, but in better shape than the FTSE
The DAX is also struggling, but the setup is materially better than the FTSE 100. Price has drifted back towards the 200-day moving average at 24,100, with the 50-day moving average around 23,900 just beneath.
There is also an open gap lower towards 23,700, and while the index remains below the 24,500 area, that gap-fill remains a realistic short-term objective.
Unlike the FTSE, the DAX still has one important technical advantage: the RSI remains above 50. That keeps the market in a more constructive position and supports a buy-on-dips approach, especially towards the 50-day line.
Key DAX levels:
- Resistance: 24,500
- Support: 24,100 and 23,900
- Gap-fill target: 23,700
Dow Jones: still near the highs despite ugly geopolitics
The Dow continues to behave as though the geopolitical situation is somebody else’s problem. It remains near the highs even as the macro backdrop remains anything but comfortable.
Technically, there is the outline of a bull flag forming just under the big 50,000 level. If the Dow can deliver an end-of-day close through 50,000, the next upside projection becomes 52,000.
If that breakout does not come through, the more logical move would be a retest of the 50-day moving average at 47,900. That also lines up with the breakout line from February, making it a meaningful support area.
Key Dow levels:
- Breakout level: 50,000
- Bullish target: 52,000
- Fallback support: 47,900
Bitcoin: surprisingly chirpy, but now testing an awkward ceiling
Bitcoin has looked rather more upbeat than many would have imagined in the current environment. That said, this is not a market to chase blindly because it is now nudging the top of its recovery channel, and that raises the risk of a repeat of the kind of failure seen back in January.
There is also an important horizontal hurdle from February around 79,000. An end-of-day close above that level would improve the picture significantly and shift the focus towards the 200-day moving average at 85,000.
The fact that some of the Bitcoin treasury-related shares are rising suggests the market is at least willing to believe in a recovery phase, even if it is only one stretching towards 85,000 rather than something more dramatic.
On the downside, the obvious support is the 50-day moving average at 71,000.
Key Bitcoin levels:
- Resistance: 79,000
- Upside target on breakout: 85,000
- Support: 71,000
Ethereum: same setup, same warning
Ethereum is in a very similar position to Bitcoin. Once again, the concern is that the market could be tracing out the same sort of setup seen in January, when price pushed into resistance and then rolled over.
The upside level to watch is 2,470, which marks the top of the February recovery channel. On the downside, support comes in at the 50-day moving average of 2,161.
Ethereum is also sitting near the top of the broader falling trend channel that has been in place since the summer. In simple terms, bears would argue this is a logical area to short, while bulls would prefer to wait for a lower-risk entry closer to the 50-day line.
One encouraging point is that the RSI uptrend line is still intact. That is a decent show of resilience and keeps the market from slipping fully into the bearish camp.
Gold: struggling under trend resistance
Gold has had a more difficult time. Price is stuck below the top of a falling trend channel from January and also below the 50-day moving average at 4,876.
That leaves the market vulnerable to a drift towards 4,600, which looks like the most likely support zone for now. The expectation is not for a collapse beyond that level, although the warning sign here is that RSI has now fallen below neutral 50.
If the weakness deepens more than expected, then the worst-case chart support becomes the 200-day moving average at 4,240.
Key gold levels:
- Resistance: 4,876
- Likely support: 4,600
- Worst-case support: 4,240
WTI crude oil: still the market of the moment
Crude oil remains the standout chart. It managed to break out of the recent consolidation triangle, which keeps the bullish structure alive.
Above 92 dollars, the next notable resistance is up towards 105 dollars. The tone is still bullish, even if it is a touch less explosive than it looked previously.
The immediate point to hold is around 94 dollars. If that gives way, the market could slip back for another test of the 50-day moving average at 86 dollars. That level also coincides with the floor of the rising channel from January and, for now, looks like the worst that should be expected.
Of course, any peace or ceasefire development could shift the entire picture quickly. Until then, the trend remains constructive.
Key WTI crude levels:
- Breakout level: 92 dollars
- Bullish trajectory above: 94 dollars
- Upside target: 105 dollars
- Fallback support: 86 dollars
Small-cap stock charts to watch
The stock section is full of names that are either turning around from left field or quietly building momentum under the radar. Several of these are obscure, but obscure does not mean uninteresting, especially when the charts are beginning to line up.
Active Energy: gap-driven recovery gathers pace: Active Energy has produced a sharp recovery with two upside gaps. First came a bear-trap gap reversal around 0.07p, then a further gap through the 200-day moving average at 0.1p. That is unusually strong price action. The initial target was 0.12p, and above that the next target is 0.15p. On current form, there may even be more to come, but 0.15p is the main objective for the coming days and potentially by month-end.
Connecting Excellence: step progression points to a turnaround: Connecting Excellence has the look of a turnaround setup. One of the most encouraging signs is the step progression in the chart, which is often a reliable feature in recovering situations. As long as the shares stay above the floor of the channel from February at 1.75p, the target remains 3.2p, potentially by the end of next month.
Diales Group: break above first target opens a bigger move: Diales has already broken through the first target, which was the top of the falling trend channel at around 22p. Above that, attention shifts to a much bigger technical projection based on a 2022 resistance line, effectively the top of a multi-year triangle. That gives a target of 40p, with scope for that move by the end of June or perhaps even earlier. Ideally, the shares now stay above the rising 50-day moving average at just under 24p. Both the 50-day and 200-day lines are rising, so this is effectively a golden cross situation.
Deltic: explosive response after the setup was flagged: Deltic moved from around 3.25p to as high as 8p in less than 24 hours. The original target was 5.7p by the end of next month, but the market clearly had other ideas and got there in a hurry. For anyone still looking for further upside, the more ambitious maximum target appears to be around 10p, provided the shares hold above the old target area at roughly 5.75p.
DeFi Development: a punchy chart with a punchy target: DeFi Development has one of those charts that makes you pay attention simply because the structure is beginning to tighten in the right way. There appears to be a rising trend channel base, a small bullish consolidation, and a supportive momentum setup. The key trigger is an end-of-day close above the 50-day moving average at 45p. If that happens, the chart opens up towards £1, potentially by the end of June. That is a punchy call, but it is also a fairly punchy chart, helped by an RSI 50 rebound and bullish divergence.
EnSilica: the breakout stock everyone piled into: EnSilica had the classic big breakout day last Friday, and then followed it up with significant company news. The chart remains constructive while the price holds above 70p. Above that level, the target becomes the upper parallel of the rising trend channel from June last year, which points as high as 93p by the end of next month. If there is any short-term wobble, yesterday’s support at 66p is the fallback area to watch.
First Development: dark horse riser with another leg possible: First Development has already reached its first target at the top of the falling trend channel from October around 2.6p. An end-of-day close above 2.6p would set up a move towards the top of the broadening triangle from November, which comes in at around 3.75p by the end of next month. Ideally, the shares now stay above the 50-day moving average at 2.3p.
Inspiration Healthcare: triangle breakout points higher: Inspiration Healthcare has reached the top of a broadening triangle at 28p. If price can hold above that, the upper parallel of the same formation points towards 36p by the end of next month. This is another relatively obscure chart, but the structure is clean enough to deserve attention.
Kistos: still looking for 320p: Kistos continues to grind higher. The shares reached 315p, just shy of the long-standing 320p target. That objective remains in place following the earlier completion of the first target at 228p. With recent resistance at 280p now behind it, the chart still points to 320p over the next week or two.
Ondine: bubbling under and ready to pop: The shares are back at the top of the falling trend channel at around 12.25p to 12.5p. A break above there opens the way towards the next target at 18p by the end of next month. The setup is supported by a sideways shuffle above a rising 50-day moving average and an unfilled upside gap from the beginning of the month. Those are often the sort of ingredients that precede a pop. The upside remains valid while the shares stay above the 50-day moving average at 10.6p.
Pantheon: benefiting from the oil backdrop: Pantheon has been slow, but with oil moving sharply higher the stock has started to respond. The shares are trading within a rising trend channel that points up to 14.75p by the end of next month. That scenario remains valid while the price stays above the floor of the channel at around 10p to 12p.
Predator: technicals improving despite the usual drama: Predator is looking better than usual on the chart. The shares are back above the floor of the gap at 3.6p, and above that level the upside target is 5.5p next month. What makes the setup stand out is the momentum profile. There is a triple RSI 50 rebound, and the shares are moving into the run-up to a golden cross between the 50-day and 200-day moving averages. That pre-golden-cross phase is often the strongest part of the cycle. So for once, Predator really does look as though it may be on its way.
Star: strong progression inside the rising channel: Star finishes the list with one of the cleaner-looking patterns. The shares have made a beautiful progression within a rising trend channel that has been in place since September. The floor of the channel lines up with the 50-day moving average at 14p, and above that the chart points towards 22p by the end of next month, although it may take slightly longer.
The broad takeaway
The market is split. Some major indices are wobbling at important support levels, oil remains in a strong bullish structure, crypto is proving unexpectedly resilient, and a batch of small-cap names are showing classic recovery and breakout behaviour.
The clearest lesson from the current tape is that support and resistance levels matter enormously. In several cases, the charts are sitting right on the edge between continuation and failure. For the FTSE, that means respecting the floor of the channel. For Bitcoin and Ethereum, it means not getting carried away beneath major resistance. For crude oil, it means recognising that the trend is still your friend unless the market decisively breaks down.
And in the small caps, the theme is straightforward enough: when step progression, bullish gaps, rising moving averages, RSI rebounds, and golden cross setups all start appearing together, the market is usually trying to tell you something.
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.
