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, ARC Minerals, CML Microsystems, Dialight, Delta Gold Technologies, First Development Resources, GEO Exploration, Hamak Strategy, ITM Power, Premier African Minerals, Red Capital, Time To ACT, and VSA Capital Group
The market setup is still split down the middle. Major indices are holding up surprisingly well, even with the geopolitical backdrop and oil in focus, while crypto remains the weak link. On the stock side, there are plenty of small-cap charts that still look lively, and in several cases, very lively indeed.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
What follows is a full chart-based rundown of the FTSE 100, DAX, Dow, Bitcoin, Ethereum, gold, WTI crude oil, and a clutch of closely followed London-listed small caps. These are technical observations, not hard recommendations, but there is enough here to frame where momentum is building and where the danger signs are starting to flash.
FTSE 100: a dip after the bull trap, but structure still positive
The FTSE 100 has had a wobble after a brief bull trap through the initial May resistance area around 10,500. That failed push higher has brought attention back to support, with the first important level sitting at 10,344, roughly where the rising 50-day moving average comes in.
For now, the broader picture is still constructive. The 50-day line is rising, and the RSI is above neutral at 51.8, which suggests the market has not rolled over decisively. The bearish scenario, if things deteriorate, would be a sharper pullback toward 10,240, which marks the floor of the rising trend channel in place since late September or early October.
On the upside, the key trigger is a move back through the recent peak around 10,500. If that gives way properly, the next obvious target is April resistance near 10,700. Best case by the end of next month, particularly if the geopolitical clouds clear, would be around 10,850 at the top of that autumn channel.
DAX: one of the stronger charts on the board
The DAX continues to look robust. It has managed to gap through the January resistance line at 25,000, and that breakout opens the way toward 26,300, which combines the top of the March channel with a one-year resistance time projection.
The RSI is supportive here too, sitting just under 60, so momentum still looks healthy rather than stretched. Even if there is a pullback, the worst-case zone currently appears to be 24,500 at the floor of the rising channel.
One of the more interesting features on the DAX is the moving-average setup. Both the 50-day and 200-day lines are rising and heading toward a golden cross in the next two to three weeks. That phase heading into a golden cross can be one of the strongest parts of the cycle, so this remains a chart worth respecting on the upside.
Dow: above 50,000 and still pressing on
On the Dow, every day above 50,000 still feels like a bonus, and a big one given the backdrop. Yet the chart is doing what strong charts do. It has formed a bull flag above old resistance and remains above the uptrend line from March, just under 50,000.
As long as 50,000 holds, the technical bias remains higher, with a November resistance line projection pointing toward 53,000 by the end of next month.
Momentum confirmation comes from the RSI, which has bounced multiple times from above 50 in recent weeks. Add in sharply rising 50-day and 200-day moving averages, and the Dow remains one of the cleaner bullish index setups.
Bitcoin: a poor technical look after losing the 50-day line
If the major indices look resilient, Bitcoin looks like the opposite. It has fallen through the rising 50-day moving average, and that is rarely a healthy sign. In fact, it is about as poor a look as you can get in a market that had previously been trying to trend higher.
The main fear now is a slide toward the floor of the rising February trend channel near 75,500 in the near term. Adding to the concern is a double fade below RSI 50, which acts as a double warning signal to the downside.
For the bulls to steady matters, Bitcoin would need to reclaim the 50-day line, which is the current range ceiling around 81,100. Until then, the bias stays defensive.
Ethereum: weaker than Bitcoin, and flirting with oversold conditions
Ethereum is in even worse shape, which tends to be the pattern when Bitcoin itself is struggling. Price has already broken below the floor of the February price channel at 2,060, and that leaves the market vulnerable to another test of the 1,900 to 2,000 area.
That retest is effectively under way already, but the more important point is that the market remains below the broken channel line. While Ethereum stays under 2,060, rallies are likely to be viewed with suspicion.
There is, however, one caveat. The RSI has dropped below 30, meaning the market is threatening to become oversold. That can produce an interim rebound, even if the broader setup remains bearish and even if prices roll over again after any bounce.
Structurally, Ethereum is weaker than Bitcoin because both the 50-day and 200-day moving averages are falling. That is the sort of dead-cross environment that tends to keep pressure on price action rather than relieve it.
Gold: sitting on the 200-day moving average
Gold has disappointed by drifting back to the 200-day moving average and then failing to bounce convincingly from it. That level, around 4,393, had looked like it might provide a brief touch-and-go support area, but instead the market has simply sat on top of it.
For bulls, this is a pivotal spot. If there is going to be a technical long setup, this is the now-or-never area unless the preference is to wait for a deeper move toward 4,500, which marked the year-to-date low zone referred to in the chart discussion.
On the upside, any recovery while the 200-day line holds would initially point toward the 50-day moving average near 4,630.
WTI crude oil: weak despite Gulf tensions
Crude oil remains surprisingly weak given continuing tensions in the Gulf. The chart has not responded in the way many would expect from the headlines. Instead, it gapped down a few days ago and has stayed below that gap at 95.40 even during rally attempts.
That is usually a poor sign. It implies not only a break of recent support around 89, but also the likelihood of a retest of the 80 area, which was support back in April.
If there is a recovery, it first needs to fill back above the gap at 95.40. Above there, 97.69 would be the next obvious target, but for now the technical tone remains soft rather than bullish.
Small-cap charts
The stock selection is where things become more colourful. A number of names are shaping up well technically, and in several cases the pattern is the classic one of rising above a rising 50-day moving average, often after a trap move or a basing formation.
ARC Minerals: bear-trap island reversal in play: ARC Minerals has produced a pattern that tends to catch the eye quickly: a bear-trap island reversal. The shares gapped down in April and have now gapped up through the 50-day moving average. There is also bullish divergence on the RSI, with May price lows undercutting prior levels while momentum stayed flat rather than collapsing. That tends to hint at selling exhaustion. Above the 50-day line at 0.45p, the target becomes the top of the channel at 0.76 by the end of next month. It is a punchy target, but this is also a punchy chart.
CML Microsystems: target achieved, now a possible extension: CML Microsystems has already done a lot of what it needed to do by reaching the 3.70 target. The next stage would be an end-of-day close above that level, or perhaps more conservatively above the intraday high around 375p. If that happens, the chart opens up toward 460 by the end of next month. Ideally the shares hold above the 345 to 350 area, which now becomes the key near-term support band.
Dialight: gap through resistance followed by bull flag breakout: Dialight has one of the cleaner momentum charts in the list. The shares gapped through resistance and then broke out from a bull flag, a pattern that often signals trend continuation rather than a one-off spike. That leaves the top of the channel at 443p as the target by the end of next month, provided price remains above the old broken resistance at 371.
Delta Gold Technologies: support at £1 remains the line in the sand: Delta Gold Technologies has suffered a bit of a rug pull, but the broader structure still has a recovery feel to it. The shares have tested the £1 area three times and bounced above the rising 50-day moving average, also around £1. While that level holds, the first recovery target is 135p. A close above there would bring the 175p peak from earlier in the month back into play.
The more ambitious target is the top of the rising channel from February, which points as high as £2. That may be one for the end of June rather than immediately, but above the 50-day line the chart still favours repair rather than collapse.
First Development Resources: bounce from the 50-day line hints at a bigger move: First Development Resources is another one bouncing from a rising 50-day moving average, and that setup often precedes a more forceful move higher. The target here is 3.8p, based on the top of the triangle from back in November and the 200-day moving average. The timeframe given is by the end of next month, while the shares remain above the 50-day line at 2.34p.
GEO Exploration: broadening triangle base and a bear-trap rebound: GEO has a broadening triangle base developing, with support clustered around the 50-day moving average near 0.10p. After a bear-trap rebound from below 0.09p, the chart now points initially toward 0.15p. If the move extends, 0.20p and the 200-day moving average become realistic upside markers by the end of next month. The key condition is straightforward enough: hold above the 50-day line.
Hamak Strategy: improving, but still needs a close above resistance: Hamak Strategy is improving after a decent company announcement, but the chart still needs confirmation. The shares remain within a falling trend channel, so the next technical hurdle is an end-of-day close through the 50-day moving average, roughly 0.85p. If that breakout arrives in the coming days, the top of the falling channel from December points toward 1.30p.
ITM Power: finally through £2 and looking for fresh upside: ITM Power has been threatening a move through £2 for some time, and now it has done it decisively, trading as high as £2.18 on the day. There is a resistance line projection around £2.03, and once that is overcome the chart effectively shifts into a fresh leg higher. The upper parallel of the rising formation points as high as £2.67 by the end of next month. Again, a punchy target, but the chart has earned the right to be treated seriously.
Premier African Minerals: surprisingly constructive if support holds: Premier African is one of those stocks that always comes with a degree of trepidation, not least because the fear of a fund raise never seems too far away. But the chart itself has improved. The shares are rising above a rising 50-day moving average, and as with several other names in this review, that can be the prelude to a stronger move than many expect. Above 0.018p, the top of the channel points toward 0.030p by the end of next month, with the usual caveat that corporate actions can change the picture quickly.
Red Capital: third target reached early, fourth target now on the table: Red Capital has been moving so fast that the third target, originally pencilled in for the end of next month, was effectively reached by lunchtime. When a chart is doing that, it often makes sense to redraw the upper parallel and see where the next extension lands. That next target comes in as high as 87p by the end of next month. Ideally, the shares should deliver an end-of-day close above 60p to support that scenario. Those with deeper pockets might tolerate a drift back toward 50p, but 60p is the cleaner level to watch.
Time To ACT: a standout setup from the Aquis market: Time To ACT is one of the more interesting under-the-radar names. The shares are rising above a rising 50-day moving average and have also pushed through the 200-day line at 10.8p. That leaves two upside markers in play: An initial target at 12.8p, retest of September resistance at 20p, potentially by the end of next month As with the rest of the stronger setups, the health of the chart depends on staying above support, in this case the 50-day moving average at 8.4p.
VSA Capital Group: unusual strength worth noting: VSA Capital Group is not a chart that usually appears on many radar screens, but the price action has become difficult to ignore. The shares were up sharply, and the technical picture has improved enough to suggest something more meaningful may be going on. The key development is a break through the 200-day moving average at 3.3p. Above that, the chart points toward 5.8p by the end of next month, or perhaps even sooner if the positive momentum is linked to a genuine company catalyst.
What stands out across the board
There are a few recurring themes running through these charts.
- Major indices remain stronger than expected, especially the DAX and Dow.
- Crypto is the clear weak spot, with Bitcoin below its 50-day line and Ethereum in even poorer technical shape.
- Gold is at a make-or-break support level on the 200-day moving average.
- Oil is trading badly despite a backdrop that would normally support higher prices.
- Many of the more attractive small-cap setups share the same feature: a move above a rising 50-day moving average, often after a trap move, base, or breakout pattern.
If there is one practical lesson from the current setup, it is that chart strength is still highly selective. The broad market has not fallen apart, but neither is everything moving higher together. At the index level, resilience is intact. In crypto, caution remains the default. In small caps, stock selection matters more than ever.
As always, these are chart-based observations rather than certainties. Technicals can frame opportunity and risk, but they do not remove the need to do your own research and manage position size sensibly.
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.
