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, Alkemy, Ariana, Aminex, Boku, Capital Metals, Mkango, Smarter Web, SEED, Symphony, Thruvision, Tasty.
Market Indices: Record Levels and Resistance Tests
FTSE 100
The FTSE 100 closed July at record levels, opening low and finishing strong, which is a very positive technical signal. Zak notes that while the top of the current channel stands at 9,827, the index might reach this level sooner than expected, potentially prompting an upward revision of the target. On the downside, a drop to around 9,600 remains the worst-case scenario, but the general outlook is bullish barring any session disappointments.
DAX
The DAX is recovering from concerns about the Federal Reserve not cutting rates. Resistance at 24,500 is a key level to watch, with a decisive end-of-day close above this figure likely to propel the index toward the channel top near 25,500 by the end of August. On the downside, support around the 50-day moving average at 23,900 is expected to hold, minimizing risks of a sharp pullback.
Dow Jones Industrial Average
The Dow has lagged behind other indices by not reaching new highs, currently battling resistance in the 44,000 to 45,000 range. Breaking out above this range could set the stage for a move to approximately 47,400 by the end of next month, following a rising trend channel since May last year. Support lies near the 50-day moving average at 43,400, but sustained drops below 44,000 are unlikely with the RSI comfortably above neutral.
Cryptocurrencies: Consolidation and Potential Breakouts
Bitcoin
Bitcoin is currently resting at the floor of a rising trend channel, with a potential upside target near $142,000. Maintaining support above $115,000 is crucial for this move to materialize, with a key trigger being an end-of-day close above $121,000 to confirm momentum. The downside risk is limited to testing the 50-day moving average near $112,000, though a slight overlap could push support down to $109,000.
Ethereum
Ethereum appears more eager for an upward move compared to Bitcoin, despite lagging behind in terms of breaking turn-of-the-year highs. Recent support around $3,700 sets the stage for a potential direct rally to $4,400 by the end of August. If momentum stalls, a retest of the previous resistance at $3,520—top of the old rising trend channel—is expected before any further advance.
Gold: Struggling to Hold Ground
Gold has struggled recently, showing signs of breaking out of its rising trend channel. A critical level to watch is the 50-day moving average at approximately $3,340; remaining below this heightens the risk of a decline toward late June’s support near $3,220. The RSI at 40 further underscores the current weakness in the metal.
Stock Spotlight: Key Movers and Targets
Alkemy Capital Investments
After a widely anticipated announcement, Alchemy is retesting resistance around 300 pence, with prior support near 280 pence. The worst-case scenario is a pullback toward the gap floor at 210 pence, but as long as shares hold above this level, the outlook remains positive for retesting 300 pence in the coming weeks.
Ariana Resources
Ariana shows promise for a turnaround, with a significant hurdle at the February resistance of 2 pence. An end-of-day close above this level could unlock a move toward December’s resistance at 2.7 pence. The chart suggests little resistance between 2 and 2.7 pence, making this a key breakout zone to watch.
Aminex
Returning after a pause, Aminex appears to be consolidating mid-move with a target line at 1.85 pence. A close above this point could set up a retest of last year’s highs near 2 pence, and potentially push further to 2.5 pence by the end of August. Support at 1.6 pence remains a critical level to maintain the bullish trajectory.
Boku
Having hit the previous target of 230 pence, Boku remains in a rising channel from late 2021. The next upside target is around 320 pence by the end of next month, with support near 217 pence serving as a logical stop loss.
Capital Metals
Capital Metals is riding a positive trend following recent news, moving within a rising channel since December. The top of this channel, near 3.75 pence, is the target for August, with the 50-day moving average at 2.9 pence acting as strong support.
Mkango
Mkango looks solid, with the main question being the pace of its advance. The red resistance line points to a target of 45 pence by the end of August, supported by recent levels around 28 pence.
Smarter Web
Smarter Web is setting up for a potential new leg higher. The 50-day moving average currently sits at 235 pence, and a close above this, along with surpassing June resistance at the same level, could drive the stock toward the July peak near 400 pence. Maintaining support above 200 pence is key, with the RSI returning above 50 seen as a bullish bonus.
SEED
SEED has formed a V-shaped bull flag following a bear trap rebound below the 50-day moving average. This momentum should carry the shares toward the upper parallel of the rising trend channel, targeting about 3.2 pence by the end of August.
Symphony
Symphony is consolidating at higher levels, supported by the previous target near 11.22 pence. Holding above the 50-day line at 10 pence, the stock could reach 22 pence within the next month.
Thruvision
Thruvision has shown promising technical strength with a double bottom and a gap higher that remains only partially filled, signaling potential upside. Above the 50-day line at 1.22 pence, the target is around 2.5 pence by the end of August, bolstered by RSI bounces at neutral 50.
Tasty
Tasty’s shares are trading within a broadening triangle since last summer, with a target of 1.65 pence as long as it stays above the rising 50-day moving average at 0.54 pence. The hope is for the stock to deliver on this potential in the near term.
Conclusion
July’s market action has set up some intriguing opportunities across major indices, cryptocurrencies, and select stocks. The FTSE 100 and DAX are testing key resistance levels, with the Dow poised for a breakout. Bitcoin and Ethereum continue to consolidate, with potential for significant moves if key levels are breached. Gold remains cautious, while a range of stocks are showing technical setups worth watching closely.
As always, maintaining close attention to support and resistance levels, moving averages, and momentum indicators like the RSI will be crucial in navigating the weeks ahead. Whether you’re focused on broad market trends or individual stock plays, the end of July and early August offer a rich landscape for strategic positioning.
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.
