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, Apertura Energy, Bango, Delta Gold, Fragrant Prosperity, Goldplat, Halo Minerals, Iofina, MicroSalt, Narf Industries, World Chess, Xtract Resources
The market tone has turned awkward, and in a few places some of the worst fears are starting to come through on the charts. There are still levels that can hold, and there are still recovery routes available, but this is no longer a backdrop where you can casually ignore deteriorating momentum. Across the main indices, crypto, commodities, and a batch of UK small caps, the message is fairly clear: key support matters now, RSI positioning matters now, and if these technical levels go, the downside opens up rather quickly.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: pressure at the 50 day line
The FTSE 100 is testing a level that really needed to hold. The 50 day moving average came in around 10,407, and price has already touched it. That puts the focus immediately on the uptrend line from March, near 10,340, which also lines up with June support.
That 10,340 area is the main nearby risk level. Ideally, any weakness only dips briefly below it before recovering. If that zone fails properly, especially on a closing basis, then the technical picture darkens quite a bit.
On the upside, the market would need to reclaim the top of the recent range and the top of the channel near 10,620 to shift sentiment back in a more constructive direction.
The other concern is momentum. The RSI has slipped below the neutral 50 mark to 46. If that remains the case into the close, and the index continues to sit under the 50 day line, then the risk grows that 10,340 will not be the end of the move.
DAX: still in channel, but damage has been heavier
The DAX has taken the hit harder than the FTSE. There was a gap down earlier in the week, but for now the market is still holding the floor of the rising channel from March. As long as that channel support remains intact, and especially while price stays above the 50 day moving average at 24,700, there is still a chance of reversing the latest bull trap above the record highs.
If that support gives way, then attention shifts to the 200 day moving average near 24,300.
Momentum is again not helping. RSI is below 50 at 48, which keeps the pressure on the bulls. The first encouraging sign of a turnaround would be an end of day close back above the gap area around 25,300.
Dow: the villain of the piece
The Dow has been the real problem market. After overshooting a short term rising channel, it has fallen back inside it, which is never a particularly flattering development.
The immediate hope is that support around 51,900 can stabilize things. Beneath that sits horizontal support near 51,300, which is the equivalent of June support on the FTSE setup. If those levels do not hold, then a full retreat towards the 50 day moving average at 50,700 comes into view.
The key message here is simple: staying above 50,000 would still count as a decent result after the recent upside rug pull through 53,000.
If the market can regain its footing and the so called taco trade actually delivers this time, then the best case remains a move towards 54,000, based on a November resistance time projection.
Bitcoin and Ethereum: still struggling to regain traction
Bitcoin
Bitcoin has failed below a falling 50 day moving average, which is usually a continuation signal on the downside rather than the start of a proper rebound. The current worst case points to 57,300, based on a March support line projection.
There is still a route back towards the 65,000 to 67,000 region, which was previously one month support, but at the moment the RSI remains below the neutral 50 level. That leaves the balance of probability favouring another test of 60,000 rather than an immediate push back above 65,000.
Ethereum
Ethereum continues to dance around the old February low at 1,753. It has already failed at the 50 day moving average and the resistance line from April, both clustered around 1,800.
While below 1,800, the chart points towards a retest of initial July support near 1,560, with 1,550 as a possible worst case.
The one brighter feature here is momentum. RSI is still above neutral 50, which means there is at least a better chance of another upside attempt. If 1,800 can finally be broken, then 2,000 becomes the next obvious target.
Gold and crude oil: conflicting headlines, clearer charts
Gold
Gold is behaving in a slightly perverse fashion. You might expect geopolitical conflict to send it flying, but lately it has seemed to do the opposite. Leave the headlines aside and the chart is easier to read.
The metal is stuck in a range between recent resistance near 4,240 and old October support around 3,900. RSI is still below 50, so another dip under 4,000 cannot be ruled out while 4,200 continues to cap the upside.
Crude oil
Crude has gone through a full geopolitical whipsaw. The earlier slide towards 67 dollars to 68 dollars almost took the market back to levels seen before the conflict premium kicked in around the Strait of Hormuz supply worries.
Since then, oil has retested the 200 day moving average around 74.50, which was the obvious recovery hurdle. As long as price stays below that level, the chart still allows for another move back towards the 67 to 68 dollar area, which is also the February gap floor.
RSI is below neutral 50 here as well, so this remains more of a sell into strength market than a buy the dips market for now.
UK stock technical setups
On the stock side, the geopolitical backdrop has not exactly helped the mood, but there are still some very interesting technical setups around. In fact, several names are showing the kind of patterns that often precede aggressive upside moves.
- Apertura Energy: Apertura has broken a significant resistance line around 95p. Above that, there is scope for a partial or even full retest of June resistance towards 150p. What makes the chart especially attractive is one of the favourite bullish setups: a rebound above a rising 50 day moving average. That usually suggests the market is too strong to stay suppressed for long. A similar rebound happened in May, and this looks like a repeat. Best case, the shares could head to 180p by the end of next month. That is a punchy target, but at the moment it is a punchy chart too. The key support is the 50 day line around 78p, and RSI has moved back above 50 as well.
- Bango: Bango had a strong update and the shares responded well. The technical view is to give the move the benefit of the doubt. If the stock can break 65p, which is the top of the current channel, then there is room as high as 85p by the end of this month, even if the market later decides to fade the move.
- Delta Gold: Delta continues to ignore the noise. The negative commentary around the company appears to have run out of steam, and the shares have simply kept going. The stock is bouncing above a rising 50 day moving average and has already broken recent resistance at 155p. That keeps the 170p to 180p zone firmly in play.If the shares stay above the 50 day line at 148p, the best case target extends all the way to 240p. The market cap has now moved above 100 million pounds, and from the listing window in question, the stock has already delivered roughly an eightfold rise. That is a serious technical win for the bulls.
- Fragrant Prosperity: Fragrant Prosperity is becoming more interesting by the day. There has been some stake building, and the chart is shaping up rather nicely. The setup is a sideways shuffle above a rising 50 day moving average, and that pattern is often associated with the biggest near term moves. The initial target is 0.58p, corresponding to March resistance. There is also a saucer type turnaround in the background, and the recent TR1 announcement adds to the sense that something may finally be happening after months of waiting. As long as the shares remain above the 50 day line at 0.43p, the chart deserves attention.
- Goldplat: Goldplat has gapped at the highs, which is normally a very strong sign. The minimum expectation from this setup is a move towards 21p in the coming days, provided the shares hold above broken resistance at 18p.
- Halo Minerals: Halo Minerals is a slow burner, but it has started to improve technically. The shares broke a resistance line from April around 9.5p, then moved above the 50 day moving average earlier this week. The final piece of the puzzle is for the 50 day line itself to start rising. If that happens over the next few sessions, then 15p by the end of this month, or even sooner, comes into view. The stop loss area is the floor of the channel, just below 10p.
- Iofina: Iofina continues to look one of the stronger medium term setups. The target remains 67p, based on the top of the chart channel and a November resistance line projection, with that move potentially completing by the end of next month. The stock remains constructive while above the 50 day moving average at 48p. What stands out is the series of support points above that rising 50 day line. That is one of the clearest technical tells that a bigger move may be brewing.
- MicroSalt: MicroSalt has been something of a car crash and has attracted plenty of bearish attention. Even so, there is a small technical silver lining. The shares have made lower lows in July, but RSI has stayed roughly the same. That creates a bullish divergence, and it opens the possibility of a rebound towards 30p to 35p. Even if the shares later roll over again, that kind of recovery bounce is still plausible from here.
- Narf Industries: Narf Industries has essentially spent the last year moving sideways in a range. The hope now is that the shares are sitting near the bottom of that range after dipping into oversold territory. On previous occasions, when the indicator has moved into the same green oversold zone, it has marked the low of the move. If that pattern repeats, then a break of the 200 day moving average around 0.48p could trigger a move to 0.70p by the end of next month, likely with some positive contract news helping things along.
- World Chess: World Chess is still a longer shot, but then that description fits much of the small cap market. The shares have bounced off the 50 day moving average, and there is also a rising trend channel base around 0.27p. While above that area, the target is up to 0.5p by the end of next month. The setup is backed by an extended RSI 50 rebound, and that often points to a larger upside move beginning to form.
- Xtract Resources: Xtract has been rangebound recently, but the chart still looks decent. The shares have bounced from the bottom of the channel and remain above a rising 50 day moving average. The immediate hope is that the stock stays above 1p. If it does, then there is room for a move towards the top of the channel and range, potentially as high as 1.5p by the end of this month. Both the 50 day and 200 day moving averages are rising, which adds a solid technical underpinning to the setup.
What matters most right now
The common thread across the broader market is that momentum has weakened just enough to make support levels critical. In several major markets, RSI has slipped below neutral 50, and that tends to shift the posture from buying dips to selling strength unless price can quickly reclaim lost ground.
At the same time, a number of individual UK stocks are showing much better relative strength than the indices. The standout patterns include:
- Rebounds above rising 50 day moving averages
- Sideways consolidations above trend support
- Breakouts through established resistance lines
- Bullish RSI behaviour, especially rebounds through the 50 level
So the backdrop may be miserable, but there are still charts out there doing their best to look bullish. The key is being selective. The major indices are flirting with damage, crypto remains hesitant, commodities are mixed, but a handful of stock setups are still shaping up nicely if their support lines continue to hold.
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.
