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, Gold, Avacta, Boku, Cloudbreak, Genflow, ITV, Mkango, Manx, Nativo.
Market Indices: FTSE 100, DAX, and Dow
FTSE 100: Momentum Building
The FTSE 100 is showing impressive strength, currently flying high without much acknowledgment from the government, which Zak finds quite intriguing. Since May, the index has been moving within a rising trend channel, with the critical support level at 9040. Zak anticipates a potential push towards 9240 by the end of August, although the market may achieve this as early as July.
On the downside, a retest of the June resistance and May channel floor at 8910 could be expected if momentum falters. However, the prevailing sentiment is bullish, with the FTSE heading in a positive direction.
DAX: Consolidation and Patience
The German DAX index recently experienced a gap up, marking the fourth RSI 50 rebound in the past month—a sign of a somewhat flailing market attempting to regain strength. The top of last year’s channel near 25,200 remains the target, but this level might only be reached by the end of next month rather than this one. Holding above the 23,900 level, supported by the 50-day moving average, will be key to maintaining upward momentum.
Dow Jones: Breaking Out of the Range
The Dow has been confined to a 44,000 to 45,000 range, forming a flag pattern that broke out spectacularly recently. Surpassing the 44,600 mark opens the way toward the rising trend channel top from May last year at 47,400, expected by the end of next month. Staying above 44,000 is critical for this bullish outlook.
Cryptocurrency Outlook: Bitcoin and Ethereum
Bitcoin: Clinging to Support
Bitcoin remains in consolidation mode within a steeply rising trend channel established since April. The critical resistance level stands at 128,000, with an upside target stretching to 144,000 by the end of next month. Support is holding near the floor of the April 2025 channel at 115,000, with a worst-case scenario involving a test of May resistance at 112,000 and the 50-day moving average near 110,000.
Ethereum: Eyeing February Resistance
Ethereum has pulled back toward the top of its old rising trend channel from March, with support at 3,480. As long as this level holds, the next target is the upper parallel of the channel near the February resistance at 4,300 by the end of next month.
Gold: Testing Resistance Levels
Gold showed promise this week but failed to break through the April resistance line at 3,430, which is a slight disappointment. The target remains the top of the channel at 3,800 by the end of next month, provided gold stays above the 3,430 mark. Support is firmly in place near 3,335, just below the 50-day moving average.
Stock Watch: From Oil Tankers to Tech and Media
Avacta Group: Turning a Corner
After recently paying off some debts, Vector’s shares have started to look promising. With four consecutive blue candles and an RSI 50 rebound, the stock could move up to the top of a broadening triangle from December, potentially reaching 45p by next month. Holding above July resistance at 34p is essential for this positive momentum.
Boku: M&A Potential
Boku has been consolidating within a rising trend channel since spring last year. The target price stands at 227p, as long as shares remain above the recent gap at 208p. Multiple RSI 50 rebounds since April suggest a strong technical picture, supporting this upside projection.
Cloudbreak: Recovery Mode
Cloudbreak is attempting recovery within a rising trend channel, with the top at 0.28p expected by next month. A key trigger for further gains would be an end-of-day close above the 50-day moving average at 0.18p.
Genflow: Building Momentum
Genflow has ramped up news flow recently and is consolidating above the 50-day line at 0.79p. The stock is targeting 1.44p by the end of next month, which corresponds to the top of a falling trend channel from last year. A bullish divergence supports this outlook, and signs suggest the 50-day line may already be starting to rise.
ITV: Unexpected Breakout Potential
Though typically overlooked, ITV shows signs of a potential breakout alongside new highs in the FTSE. The stock is in a rising trend channel since July last year, with a target near 102p. A weekly close above 85p could open the door to surpassing 100p by the end of next month.
Mkango: Riding Positive News
Mkango continues to benefit from positive news releases, with recent support at 30p. The next target is 45p by the end of next month, aligned with a March resistance line projection.
Max Financial: Strong RNS Momentum
Max Financial has delivered solid RNS updates, pushing the stock to hit an initial target of 25p. The next goal is 35p by next month, based on a late 2022 resistance line, as long as shares hold above the 50-day line at 22p.
Nativo: Late to the Digital Treasury Party
Nativo announced a Bitcoin treasury strategy, albeit about two months late. The shares have risen around 9%, which pales compared to the potential 50-100% gains had the announcement come earlier. Near-term resistance is at 0.57p, with a realistic best-case scenario of hitting the 50-day line at 4p, provided no new lows below 0.025p are made.
Conclusion
The markets are showing a fascinating mix of strength and cautious optimism across various sectors. Major indices like the FTSE 100 and Dow are poised for potential breakouts, while cryptocurrencies remain within critical support and resistance levels that could dictate near-term directions. Gold is testing key resistance, and selective stocks, especially those with recent positive developments or technical rebounds, offer compelling opportunities for investors.
Staying attuned to these technical levels and momentum signals will be crucial as we navigate the remainder of the summer trading season.
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.
