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, Pound/Dollar, Alien, Anemoi, Ascent, African Pioneer, Crystal Amber, East Star, Eurasia, ITM, Mkango, Powerhouse, Rockfire, Smarter Web, Wishbone.
Market Indices Overview
The Footsie 100
The Footsie 100 is currently testing critical technical levels. The 50-day moving average has aligned closely with the bottom of the range at 8,700, which is expected to act as strong support. Resistance isn’t just at the familiar 8,800 mark but more importantly at 8,820. Breaking past this could open the way toward the 9,020 level and the top of the rising trend channel established since spring last year.
From a technical perspective, any dip toward the 50-day line should be seen as a buying opportunity. The Relative Strength Index (RSI) sits comfortably at 55, just above neutral 50, and has shown two clear bounces, often a leading indicator of upward momentum.
DAX Performance
The DAX has shown some recent softness but continues to find support at the 50-day line around 23,600, comfortably above the previous March resistance of 23,500. The RSI has also bounced off the 50 level, suggesting potential for the DAX to push toward the 25,000 zone by the end of July. Should the market falter, a retest of the 23,100 support area from last month would be the downside scenario to watch.
Dow Jones Industrial Average
The Dow kicked off July on a strong note, breaking through March resistance around 44,000. The next targets are the yearly highs near 45,000 and potentially the upper boundary of the rising trend channel at 47,500. While reaching 47,500 by the end of this month is optimistic, it appears more plausible by the end of August. On the downside, a fallback toward June resistance near 43,100 would be a key support to monitor.
Cryptocurrency and Commodity Highlights
Bitcoin’s Technical Outlook
Bitcoin continues to grapple with market indecision despite strong buying interest. Encouragingly, it has broken through the May resistance at 109,000 and is eyeing the 112,000 peak. The ideal target lies around 125,000, aligned with the March 2024 trend channel ceiling. The RSI has rebounded above 50, and with Bitcoin holding above its 50-day moving average near 106,000, the stage is set for a potential rally toward 125,000 by the end of the month.
Gold’s Recovery Path
Gold has clawed its way back into the rising trend channel established in March after a brief two-day “rug pull.” The 50-day moving average near 3,320 is a critical support line. Above this, gold could target the April resistance at 3,450, with a best-case scenario pushing toward 3,800 by the end of next month. The RSI at 53 and a strong candle formation at the end of June indicate renewed buying interest below 3,300.
The British Pound
After a surprising emotional moment from the Chancellor, the pound has performed well, recovering from January lows toward 1.21 USD. The technical outlook remains positive as long as the pound holds above 1.33 USD, with a target near 1.40 USD. The RSI at 57 and rising 50- and 200-day moving averages suggest momentum is building, likely supported by market expectations that interest rates will remain steady.
Stock Market Movers and Technical Breakouts
Alien Metals
Alien Metals released a substantial RNS, signaling serious potential beyond typical junior explorers. The stock has gapped off lows and pushed through its 50- and 200-day moving averages around 0.08p, targeting a rise to 0.18p by the end of August. Staying above the 200-day line near 0.09p is crucial for sustained upside momentum.
Anemoi
As part of the Bitcoin-related sector, Anemoi has consolidated around 1.75p, showing solid support. Provided the company can manage its fundraising, a move back toward the previous target of 3.6p by month-end is plausible. Multiple RSI bounces around 50 support this bullish outlook.
Ascent Resources
Good news regarding arbitration has sparked a 17% jump in Ascent Resources shares. The stock is aiming for the 50-day moving average near 0.65p by the end of July. With an RSI previously in ultra-oversold territory around 0.10, this technical rebound indicates strong potential for further gains.
African Pioneer
Despite trading within a falling trend channel since November, African Pioneer has shown encouraging signs with a double RSI bounce at 50 and a break above the 50-day moving average. The stock opened at lows but closed at the day’s highs, with an initial target near 1p by the end of August. Resistance at the gap top around 0.87p and support near 0.6p will be important to watch.
Crystal Amber Fund
Crystal Amber Fund continues a steady ascent within a rising trend channel dating back to summer 2023. The top of the channel at 170p is a key target by month-end, with the market capitalization £100 million—an important milestone. Maintaining support above the gap floor at 135p and the gap top at 139p bodes well for continued upward momentum.
East Star Resources
East Star Resources has bounced off the 200-day moving average with an RSI push above 50, signaling positive momentum. The stock is targeting the top of its range near 1.75p by the end of July, with the 50-day average rising around 1.36p supporting the move.
Eurasia Mining
Following dual listing news, Eurasia broke through recent resistance around 5p and is aiming for 8p this month. RSI and moving averages are all in support of a strong rally, suggesting the stock is back on an upward trajectory.
ITM Power
ITM Power has methodically hit several technical targets, currently at 85p and eyeing the £1 resistance from 2023. The RSI has stayed above 50 since early May, underscoring sustained strength. A break above £1 by the end of July would be a significant milestone.
Mkango Resources – Stock of the Day
Mkango Resources impressed with a powerful breakout above the 26p technical target, surpassing the rising trend channel top. The next resistance zone lies near 35p, coinciding with 2021 highs. Staying above recent support at 20p is critical for maintaining bullish momentum.
Powerhouse Energy
After a long lull, Powerhouse Energy delivered encouraging news in its recent RNS. The stock appears to be forming a rising trend channel base, with a target near 0.63p by the end of July. This would also fill a gap near 0.60p and requires holding above the 50-day line at 0.50p.
Rockfire Resources
Rockfire announced serious backing for its flagship project, breaking out of a falling wedge and surpassing the 50-day moving average near 0.9p. The initial target is the 200-day average at 0.11-0.12p by month-end. Clearing 0.10p would mark a significant turnaround.
Smarter Web
Smarter Web’s charting has been exceptionally accurate, with a recent close around 300p and a retest of the 375p high in sight. With notable interest from Michael Saylor and Bitcoin’s bullish momentum, a surge toward 600p by the end of August is within the realm of possibility. The RSI bounce below 50 has been a leading indicator of this upside.
Wishbone
Following a £1.75 million fundraising, Wishbone shares have risen from 0.28p, targeting 0.29p and potentially 0.50p by month-end. This marks a promising start for the stock’s next phase.
Conclusion
July is shaping up to be a decisive month across global markets and individual stocks. Key indices like the Footsie 100, DAX, and Dow are testing critical resistance and support levels, with technical indicators suggesting potential upside momentum. Bitcoin and gold both show signs of renewed strength, while the British pound benefits from steady interest rate expectations.
On the stock front, a mix of juniors and more established players are displaying strong technical setups. From Alien Metals’ breakout to Mkango’s impressive rally and Smarter Web’s potential surge, investors have several exciting opportunities to watch.
Staying attuned to moving averages, RSI signals, and key resistance and support levels will be essential for navigating this dynamic market environment.
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.
