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, Arc, Botswana, Carclo, Eco Animal, GCM, Ilika, Oxford Biodynamics, Predator, Symphony, Sunda, Trust Pilot
Market Overview: Index Trends and Predictions
FTSE 100: Approaching Critical Resistance
The FTSE 100 is currently testing the upper boundary of a significant channel at around 9,045 points, a level that was predicted well in advance. This is a strong signal, as the index looks set to reach the top of this channel with time to spare before the end of the month.
Looking further ahead, a more aggressive rising trend line points to a potential target near 9,220 by the end of next month. On the downside, support lies near 8,908, matching an old peak from June and the channel floor. A worst-case scenario involving a tariff shock could drag prices back to the 50-day moving average, but this has not been breached since early May, underscoring the market’s resilience.
The Relative Strength Index (RSI) is hovering just below overbought territory, suggesting momentum is still intact but caution is warranted as a breakout attempts to take hold.
DAX: Positioned for an Upside Move
Tariff concerns have impacted the DAX, but the index has bounced above its rising 50-day moving average—a key leading indicator for upward momentum. Since late last month, the DAX has remained above this line, with an RSI sitting comfortably at 57, indicating a fresh push higher is likely.
The target remains 25,000 points by the end of July, reinforcing a bullish outlook.
Dow Jones: Consolidation Ahead of a Golden Cross
The Dow is currently consolidating between 44,000 and 45,000 points, forming a base for a potential breakout. Notably, the market is just days away from a golden cross—a bullish signal where the 50-day moving average crosses above the 200-day moving average.
This run-up to the golden cross often marks the strongest phase of an upward cycle. Should the Dow break above the 45,000 resistance, the next target lies near the channel top from May last year at 47,500, possibly by the end of August.
On the downside, a drop below 43,100 would signal weakness, with that level acting as a key support.
Bitcoin: Eyes on the 125,000 Mark
Bitcoin’s recent peak near 123,000 was impressive, though a pullback has opened the door for a retest of the May high around 112,000. However, the bullish trend remains intact with both the 50-day and 200-day moving averages rising.
The primary near-term target remains 125,000 to 126,000 by the end of July, with a longer-term target of 143,000 projected for the end of September, based on resistance lines from April. A retest of 112,000 would not be unexpected but would still fit within the bullish framework.
Gold: Back in the Channel with Upside Potential
Gold has returned to a defined upward channel established since early April. The immediate target is around 3,420, with a longer-term goal near 3,800 by the end of August or September.
Support lies at 3,290, the floor of the channel, while a worst-case pullback could see gold test 3,200. The RSI remains above neutral at 50, and the 50-day moving average is rising, supporting a continued bullish bias.
Spotlight on Stocks: Key Movers and Technical Setups
Arc Minerals: Bear Trap Rebound and Breakout Potential
Arc Minerals has broken above its 50-day moving average, signaling a bear trap rebound. The stock recently surpassed resistance at 1.18 pence, supported by bullish divergence in the RSI, indicating strong underlying momentum.
Targets include the top of a falling trend channel at 1.6 pence by the end of August, with further upside if the stock can maintain gains above July resistance at 0.28 pence.
Botswana Diamonds
Delivered the goods, gapping up at the end of last week, through the 0.27p level. We have hit our second target, 0.34p, and are now looking for the upper parallel of the broadening triangle from back in August, aiming for a high of 0.47p by the end of next month.
Carclo: Strong Momentum with Long-Term Targets
Carclo’s shares have gapped up above a rising 50-day line, reminiscent of previous rallies from the low 20 pence range to near 50 pence. The immediate target is 55 pence, with a longer-term aspiration of 80 pence by September, as long as the stock holds above the 50-day moving average at 41 pence.
Eco Animal Health: Break of 200-Day Line Sparks Optimism
After a challenging period, Eco Animal Health has broken above its 200-day moving average for the first time since last September. This breakout is accompanied by a gap-closed signal, having recovered the May gap at 64 pence.
The initial target is 86 pence by the end of August, supported by a pattern of higher lows since April, suggesting a positive trend reversal.
GCM Resources: Clear Resistance Breakout
GCM Resources has decisively broken above a neckline resistance at 5.3 pence, with no major resistance expected until 9 to 10 pence. Both the 50-day and 200-day moving averages are rising, and an RSI rebound above 50 backs the bullish outlook.
Ilika: Gap-Up and Sideways Consolidation
Ilika shares have gapped higher and consolidated above a rising 50-day moving average. The stock aims to retest February resistance near 56 pence by the end of August while maintaining support above 36 pence.
Oxford Biodynamics: Triangle Target Achieved
Oxford Biodynamics, the day’s standout performer, has already hit its triangle target around 0.55 pence. The stock is trading above the June peak of 0.52 pence, with a medium-term target of 0.67 pence by the end of August.
If momentum accelerates, there is potential to reach 0.84 pence, but maintaining gains above the June peak on an end-of-day basis is crucial.
Predator: Base Building and Resistance Break
Predator has built a solid base and broken above June resistance at 3.9 pence. The stock’s 50-day moving average is rising, supporting a target of 5.3 pence by the end of August or sooner. A gap remains to be filled near 5.4 pence, which may act as a near-term resistance.
Symphony: Building a Base and Moving Higher
Symphony has been called higher from recent lows, forming a new floor at 12 pence while holding above the old target of 11 pence. The stock aims for 22 pence by the end of August, aligning with resistance lines dating back to April.
Sundor: U-Shaped Turnaround
Sundor presents a challenging chart due to a spike in price, but recent action shows a U-shaped or saucer-shaped turnaround. The stock remains above the gap floor at 0.030 pence and targets the previous month’s peak near 0.042 pence.
The RSI has moved above neutral 50 for the first time since April, signaling renewed buying interest. The immediate resistance is the 50-day moving average at 0.036 pence.
Trustpilot: Approaching a Golden Cross
Trustpilot, larger than typical bulletin board stocks, is showing strong technical signals. The stock has gapped up through a rising 50-day moving average, with the 200-day moving average also trending higher.
As the stock nears a golden cross, there is potential to retest the March spike near £3.20, provided it stays above the 200-day line at £2.67.
Conclusion: Staying Ahead of the Curve
The current market environment is marked by strong technical signals across major indices and select stocks, with many poised for further gains. The FTSE 100 and DAX show resilience amid tariff concerns, while the Dow prepares for a potentially bullish golden cross. Bitcoin and gold maintain their upward trajectories, supported by rising moving averages and solid RSI readings.
On the stock front, a number of interesting setups are unfolding, from Arc Minerals’ bear trap rebound to Oxford Biodynamics’ strong breakout and Trustpilot’s golden cross approach. These present compelling opportunities for investors who pay close attention to technical developments and maintain discipline in managing risk.
With these insights, traders and investors can better position themselves to navigate the evolving landscape through July and beyond.
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.
