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, Asiamet, Aura, Ceres, Frontier Developments, Focurite, Guardian Metals, Greatland, GCM, Helios, Hydrogen Utopia, Verici.
Below I run through the major indices, cryptos, gold and a selection of UK smaller caps that have been moving this week. I will call out key support and resistance levels, RSI and moving average signals, and the likely near term targets to keep on your radar.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100
The FTSE is still enjoying its steady rally, trading around the top of the rising channel. Key levels to watch:
- Near term resistance: 9,840 (top of the channel).
- Recent support / old resistance: 9,577 on an end of day close basis.
- Rug pull / downside floor: around 9,400 (channel floor and approximate 50 day moving average).
- Optimistic target: circa 10,200 if momentum holds and the channel projection plays out into early next year.
As usual, remain above the uptrend line and the 50 day to keep the bullish case intact. A daily close below recent support would shift the probabilities toward the downside floor.
DAX
The Dax has consolidated and bounced off the floor of its April channel. Momentum is decent but not yet emphatic.
- Channel floor / support: 23,700.
- Immediate resistance: 24,100. A break above this would point to a retest of the highs.
- End of year upside target: roughly 26,100 (top of the channel).
- Risk: a rug pull to the 200 day moving average at 23,300 is possible.
- RSI: 47, below neutral 50. This is the only real caution signal for now.
If you are cautious, wait for a break above 24,100 and an RSI back above 50 before committing to fresh longs.
Dow
The Dow has found support at the initial October resistance level and looks set for another leg higher while the setup holds.
- Support: 47,000 (October initial resistance now acting as support).
- Near term upside: 48,300 (top of the channel) and around 48,000 to 48,300 later this month.
- RSI: mid 50s, bounced off a support line in the RSI window, which favors further upside.
- Rug pull: 50 day line at 46,300.
Bitcoin
Bitcoin is below the floor of the rising trend channel from March, which is a negative structural sign. There are a few important thresholds to watch.
- Immediate resistance: 103k. This was support last month and is now resistance. We need a decisive end of day close above it to regain bullish control.
- Downside: failure to clear 103k would expose the market to 98k and then as low as 93k where bid support is thin between 98k and 93k.
- 200 day: around 110k is the upside line in the sand from the current position.
- RSI: bounced off oversold 30 which is a constructive short term signal, but price action at 103k is decisive.
Ethereum
Ethereum retested August support and is just above the 200 day moving average. The structure is fragile and needs follow through to regain confidence.
- Support: 3,350 (August support), just above the 200 day at 33.70.
- Immediate resistance: the October support turned resistance around 3,580.
- Higher resistance: old broken April resistance near 3,800 would be the next meaningful hurdle.
Gold
Gold has lost some momentum from the recent rally but is consolidating in a constructive spot near the top of the prior rising trend channel.
- Consolidation area: around 3,980 at the top of the April rising channel.
- Near term resistance: 4,060 then up toward 4,170.
- Expected range: likely to trade in the 3,900 to 4,050 band for a while unless there is a clear breakout.
- RSI: okay but not yet signalling a breakout from the recent range.
Selected Stocks to Watch
Below are the smaller cap names I am following with chart targets and important technical levels.
Asiamet
- Shares broke the 1.4p target and rallied to the upper parallel. Intraday high hit 2.21p.
- Near term upside: 2.2p and, if momentum continues, up to 2.5p.
- Notable fundamental event: company sold interests in the KSK project for £80m. Market cap shown varies in public data; sentiment has pushed the stock up strongly.
- YTD performance: up about 132%.
Aura Energy
- Rising trend channel in place. Floor to respect is 10p (gap floor).
- Target for the month: 14.5p while price stays above 10p.
Ceres Power
- Has continued to surprise on the upside. First target around 175p, second around 260p and the third target was hit near 405p intraday.
- Next resistance / target: upper parallel currently heading toward about 525p, conditional on an end of day close through £4.00.
Frontier Developments
- Positive reaction to product news and licensing. Top of the rising trend channel around 5.20p was hit.
- Extension target: 6.60p by the end of the month if momentum continues.
Focusrite
- Beautiful U shaped turnaround with broken resistance at £2.36.
- Target: £3.00 by the end of the month at the current rate of progress.
- Chart looks like the kind that could attract takeover speculation if the sector heat continues.
Guardian Metals
- Bounced above the rising 50 day to start November. RSI in the low 50s.
- Immediate resistance to clear: 115p. An end of day close through 115p should invite a retest of the recent high near 146p.
Greatland
- Bounced off the rising 50 day for a second time.
- Resistance to break: £3.73. If cleared, a retest of the October £4.30 level is possible.
- Gold price will be an influencing factor for how quickly this plays out.
GCM Resources
- Has not quite reached earlier lofty hopes but is trading in a rising channel and recently bounced above the 200 day line.
- Near term chance to see 8p by year end, with the longer term target around 10p remaining conditional on stronger follow through.
Helios Towers
- Strong update and a share buyback saw the stock break the top of its rising channel.
- New near term target: 207p, with upside to 225p by the end of next month if momentum holds.
Hydrogen Utopia
- Third consecutive up day, holding above a rising 50 day and pushing through recent 2.10p resistance.
- Initial target: 2.75p. Best case into the top of the January triangle is 4.00p by the end of next month.
- If the company avoids a placing and delivers on deals, the June peak becomes a nearer term target.
Verici DX
- Trading in a rising channel and bounced from below the 50 day at 0.67p.
- Target: 0.95p by the end of next month. Key downside stop is below 0.60p.
Summary and What to Watch
- Keep an eye on the major index support and resistance levels. Daily closes above or below these lines will determine the next leg.
- For crypto, Bitcoin must reclaim ~103k on a daily close to reduce downside risk to 98k and lower. Ethereum needs to hold the mid 33k area and clear the 35.8k zone.
- Gold is consolidating. A clear break above 4,060 would open the door to 4,170. Failure to hold the channel top would see a return to the 3,900 area.
- Several small caps have compelling chart setups right now. Watch end of day closes through the listed resistance levels as confirmation before sizing positions aggressively.
More updates tomorrow. Stay disciplined and watch the key moving averages and RSI levels to manage risk.
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.
