Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are the FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, WTI Crude Oil, Anglesey, Galantas, Headlam, Hydrogen Utopia, Ingenta, Pensana, Rc365, Tekcapital, Wellnex, Wildcat, WPP.
Markets are once again sitting on the edge of their seats, with geopolitical headlines around Iran still capable of moving the major indices, commodities and cryptocurrencies quickly. The technical backdrop, however, remains surprisingly constructive across much of the market.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
From the FTSE 100 and DAX through to Bitcoin, gold and a broad collection of AIM and small-cap situations, the common theme is that several charts are holding above key support after breaking old resistance. That is normally the setup to watch for continuation higher, provided the levels discussed below remain intact.
FTSE 100: Bull Flag Above Former Resistance
The FTSE 100 is consolidating above the resistance area that held the market back during July and also around April. That is an encouraging development. Rather than looking like exhaustion, the pattern resembles a bull flag, which is normally a pause before the next push higher.
Intraday support is around 10,830. As long as that area is respected, the first upside objective is 11,000, followed by 11,400. A conservative timeframe for the higher target would be the end of next month, although the way the market is currently positioned could bring that move forward.
On the downside, 10,760, the initial July resistance area, should ideally limit any near-term pullback.
DAX: Early Arrival at the Top of the Rising Channel
The DAX has already reached the top of its rising trend channel from March, getting to the anticipated 26,300 area ahead of schedule. That in itself is a sign of strength.
An end-of-day close above 26,300 could open the door to a much more dramatic move towards 27,300. That level represents the upper parallel of the rising channel and a projection of the February resistance line.
There is no reason at present to expect a particularly deep correction. The key support area is 25,600, which was late July resistance before the market broke through it decisively.
Dow: Gap Through Resistance Still Supporting the Bull Case
The Dow has already exceeded the expectations for this stage of the move. The original best-case target for the end of the month was around 54,800, and the market has almost achieved it, reaching a high near 54,744.
While the Dow remains above the former 54,000 target, a move through 54,800 still looks achievable. If there is a pullback, the obvious support reference is the floor of the gap around 53,300.
A gap through old resistance is a powerful technical signal. It suggests that, for now, concerns around AI, technology valuations and the wider flow of negative headlines have not derailed the market.
Bitcoin: Holding Above the 50-Day Moving Average
Bitcoin has not exactly been racing away, but it has been rebuilding its position. It is now trading mostly above the 50-day moving average at 63,243, which is the key technical development.
The initial upside target is 67,000, reflecting resistance seen after June. Beyond that, the best-case target is a move towards 70,400 to 70,500, where the 200-day moving average is situated.
The 200-day moving average remains a valid upside target while Bitcoin holds above its 50-day line. On the downside, 61,000 should ideally contain any weakness.
The RSI is in the low 50s, which is a constructive area for a recovery phase. There is also an argument that the 50-day moving average is beginning to turn higher. If that develops further, it would add weight to the bullish case.
For background on this type of indicator, see Investopedia’s explanation of the Relative Strength Index.
Ethereum: Potentially Leading Bitcoin Higher
Ethereum may be showing the stronger setup of the two major cryptocurrencies. It has found support above a rising 50-day moving average, and that is exactly the sort of behaviour that can lead Bitcoin higher as well.
The immediate hurdle is the recent range high at 1,970. A break above that level would target the 200-day moving average at 2,066.
There has already been a double rebound around the RSI 50 level, suggesting the market may have more upside available than simply a test of the 200-day line. For now, though, the important point is straightforward: Ethereum needs to clear 1,970 and remain above its rising 50-day average.
Gold: Back Above the 50-Day Line
Gold has had a couple of false starts on the upside this month, but the chart is looking better again. The price is now firmly back above the 50-day moving average at 4,156, which was the initial target once last month’s resistance line was broken.
Above that level, the next objective is the 200-day moving average near 4,491. That could come into play by the end of the month, especially as the 200-day average is still rising and appears to be drawing price action towards it.
The RSI chart also provides support. Gold has respected a genuine rising trend line in the RSI window dating from June, with multiple support points confirming its relevance.
Ideally, gold now holds above both the 50-day average and the initial July resistance area around 4,200. If it does, the higher 200-day target remains the main focus.
WTI Crude Oil: The Critical Market Is Below Its 200-Day Average
Crude oil remains one of the more important charts to monitor, and it is currently giving a more cautious signal. WTI has broken below its 200-day moving average around $76.42 without producing the sort of immediate rebound one might normally expect.
Usually, a dip just below a rising 200-day line can offer a favourable long setup. On this occasion, it has not worked so far. The obvious risk is a further move down towards $70, particularly if geopolitical tensions ease.
The safest bullish trigger would be an end-of-day close back above the 200-day moving average. That could then put recent resistance around $85 back in play.
With the RSI sitting around 40 to 43, there is still scope for one final dip before a more meaningful recovery. This is a chart where patience and confirmation matter.
UK Shares: Breakouts, Gap Moves and Recovery Setups
- Anglesey Mining: Breakout Above 5p Could Target 9p: Anglesey Mining is one that deserved attention earlier. The shares have broken a resistance line dating from December around 4.8p and have also moved above the 200-day moving average, which sits just below 5p. Above 5p, the chart points towards the top of the channel near 9.3p, potentially by the end of the month. Both the 50-day and 200-day moving averages are rising, giving the setup a much better look than previous spikes. The key test is whether the shares can remain above the former June peak at 5.7p. The December rally was sold into after only two positive sessions. If this time the price holds above 5.7p, the route towards 9p and beyond begins to look realistic.
- Galantas Gold: A Bear Trap Gap Reversal: Galantas has produced one of the more interesting reversal configurations. The price has found support around the base of a rising trend channel and has gapped through the 50-day line on the latest news. As long as the shares hold above the floor of that gap at approximately 22.75p, the best-case target is around 35p by the end of next month. The technical pattern is particularly notable because the shares gapped down twice during July before producing a gap higher. That is a classic bear trap gap reversal. Consecutive gaps through the 50-day and 200-day moving averages add to the impression that something more positive is happening.
- Headlam Group: W-Shaped Reversal Points to 18p or 19p: Headlam has broken above the middle of a W-shaped reversal pattern around 7.9p. That puts the shares into a much more constructive position. The first, more modest target is the 50-day moving average around 17.75p. Beyond that, the top of the gap offers a target in the 18p to 19p area by the end of next month. The positive candles over the past week suggest that a sustainable turnaround may be under way. The simple technical condition is for the shares to remain on the right side of 8p.
- Hydrogen Utopia: A Bear Trap Rebound Above the Placing Price: Hydrogen Utopia has been held back, but the shares are now showing signs of a bear trap rebound following the recent placing at 1.9p. The longer the price remains above 1.9p, the greater the chance of filling the gap towards 2.5p by the end of the month. That level also coincides with June and July support and the 50-day moving average. The company operates in the sustainable aviation fuel area, an interesting theme in its own right. Technically, though, the chart is currently about whether the post-placing low can hold and allow a move back towards 2.5p.
- Ingenta: RSI Divergence Supports a W-Shaped Recovery: Ingenta has bounced following company news and is shaping up as another potential W-shaped reversal. An end-of-day close above 68p would provide the confirmation needed for a move towards the 50-day moving average at 74p. The best-case target by the end of next month is 83p, representing the top of the June gap down. The update included acquisition news and a board appointment, but the chart also has a useful supporting feature. The latest price low was accompanied by a much higher RSI low, creating bullish divergence. That suggests buying interest is beginning to return.
- Pensana: One-Year Support Has Come to the Rescue: Pensana has responded positively to its latest update, which was broadly a case of progress continuing rather than a finished-product announcement. The market appears willing to give the story some credit. The initial upside target remains the 50-day moving average at 77p. A potential turnaround was spotted around 60p, and the shares have responded well from that area. The best-case objective is 94p by the end of next month. That marks the area of June and July resistance as well as the 200-day moving average. The key technical point is that the old floor around 55p, which had offered support for roughly a year, came in to rescue the chart before the latest update.
- RC365: Sustained Breakout Potential Above 3.75p: RC365 has delivered well from the earlier idea that a move above 1.9p could lead to 2.6p. It has now retested the old July peak at about 3.75p. An end-of-day close above 3.75p would point towards 4p plus by the end of the month. The chart also features a W-shaped reversal, while both the 50-day and 200-day moving averages are rising. That combination gives the impression of a potentially sustained move rather than a brief speculative spike.
- Tekcapital: 5.1p Is the Level That Matters: Tekcapital has rallied, despite earlier doubts about whether the market would fully buy into the NAV argument. The issue now is that the move has reached the top of a falling trend channel from October. The key breakout zone is 5p to 5.1p. An end-of-day close above that area would put the shares back into recovery mode and potentially target 7.75p by the end of next month. That higher level is where the 200-day moving average meets post-March resistance. On the downside, the preference is for the shares to hold above recently broken resistance at 4.3p.
- Wellnex: Disposal News Could Catch the Bears Out: Wellnex has been heavily criticised by short sellers, but the disposal of Pain Away changes the picture. The reported A$21 million sale appears striking against a market capitalisation of around 4 million. Technically, an end-of-day close above the falling one-year trend channel at 6.4p could be enough to send the shares towards 10p by the end of next month, potentially sooner. The ideal outcome is for the shares to remain above the former resistance area around 4.5p. There may be plenty of criticism still to come, but the chart and valuation disconnect make this a situation that bears may find difficult to ignore.
- Wildcat Petroleum: A Binary Setup Near Long-Term Support: Wildcat Petroleum remains a more speculative and binary situation, but it is technically interesting. The shares are moving sideways around the 200-day moving average and the former resistance, now support, at 0.07p. Ideally, the price holds above 0.06p, the old resistance area. If the news flow develops as hoped, there is potential for a retest of October resistance around 0.16p. The RSI is extremely low, close to 5. The last time it reached this sort of level, the shares rallied from April support around 0.03p. That does not guarantee a repeat, but it does show why the possibility of a technical turnaround cannot be dismissed. For a more cautious trigger, an end-of-day close above the 50-day moving average at 0.09p and through the October resistance line would be the signal to watch.
- WPP: Back at October Resistance: WPP has looked like a difficult chart for some time, but the market has taken a more positive view of the latest update. The shares are back at October resistance around 377p. An end-of-day close above 377p could bring last September’s resistance through 410p into play. Those who bought below 320p the previous day may simply be taking profits already, which is understandable. But the technical question remains whether 377p can be converted from resistance into support. If it can, the next stage higher becomes much more plausible.
Levels to Keep on the Radar
- FTSE 100: Support at 10,760 and 10,830, with 11,000 then 11,400 as upside targets.
- DAX: A close above 26,300 would favour a move towards 27,300.
- Bitcoin: Holding above the 50-day average supports targets of 67,000 and then 70,500.
- Gold: Staying above 4,156 and 4,200 keeps the 4,491 target in focus.
- WTI crude: A close back above $76.42 would improve the case for a recovery towards $85.
- Small caps: Breakout levels matter most, particularly Anglesey at 5.7p, Tekcapital at 5.1p and WPP at 377p.
Across the board, the charts are offering more constructive setups than the headline noise might suggest. The key is not to get carried away by the targets alone. The support levels and end-of-day closing prices are what determine whether these recovery and breakout patterns continue to hold together.
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.
