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, Bezant, Defence, Empire Metals, Goldstone, Guardian Metal, Mila, OPG, Power Metal, Shield.
I’m Zak Mir, and in this update, I walk through the key charts and setups I’m watching across indices, crypto and a selection of small-cap stocks.
Market overview: indices
FTSE 100
We rebounded after yesterday’s test of the uptrend from June (around 9,130). I’m looking for a zigzag up toward the top of what could be a rising wedge — a structure that would be negative if it completed. A practical near-term target is about 9,330, ideally by the end of next month (or sooner).
Downside support: August support near 9,027 is the worst case; another possible support is the 50-day moving average near 8,967. We haven’t been below that 50-day since late April, which keeps the overall picture bullish even if the market sits unusually above a rising 50-day line.
DAX
The DAX is still wrestling with the July resistance line near 24,400. We half-broke it and then pulled back; a clear daily break above that area should target the top of the rising trend channel from spring — as high as 25,400 — by the end of next month.
Downside support: 50-day line just under 24,000, with primary support around 23,000. RSI is showing a positive 50-level rebound and the 50-day is beginning to slope up again, so the internals look constructive even if price action feels quiet.
Dow
The story here is persistence at the 45,000 level — we’ve been fighting it since late November. If we can get consistent daily closes above 45,000, the next logical target is the top of the rising channel from May, around 47,500, by the end of next month.
Downside: expect the 50-day moving average just below 44,000 to act as primary support.
Cryptocurrencies
Bitcoin
Frustrating environment — price sits in no-man’s land, below the channel floor from April and roughly at the 50-day moving average ($115,500). I’d like to see Bitcoin back above that 50-day and through 120,000 before the end of the week, with the upper channel target toward $132,000 by the end of next month.
Critical support points: stay above the May peak ($112,000) and ideally remain on the right side of $100,000. The 200-day moving average has only just moved above $100,000, so big drawdowns below that would be concerning. RSI is well under 50 and needs a quick correction — levels in the $117–119k range should show improvement.
Ethereum
Ethereum is still digesting last week’s extreme hype. Technicals are fragile: there’s a notable bearish divergence (price made a higher high in August but RSI did not). A controlled dip that holds above the right side of $4,000 would be constructive and could set up a rebound toward $4,400 (old resistance turning into support).
Upside possibilities: back above $4,500 and up to roughly $5,500 (the upper parallel of a February resistance line) by the end of next month — but the RSI divergence warns of more choppy action.
Commodities
Gold
Gold has been struggling near the floor of a rising trend channel from April (floor around $3,320). Above that, I’m watching for a retest of the April resistance line around $3,420 — that’s been a block. If gold clears $3,420, the path toward $3,800 by the end of next month looks plausible.
Downside risk: a rug pull could take price back to the $3,220 zone.
Selected small-cap stock setups
Below are the specific names I covered, with the levels and thought process I used in the chart review.
- Bezant — Chart looks ready to test the resistance line near 0.06p. Target 0.075p by the end of next month, ideally holding above 0.05. Recent U-shaped rebound over the past month is encouraging.
- Defence Holdings — Positive announcement led to a gap higher and a move toward the near-term target of 0.56 pence. RSI has shown a couple of 50-level rebounds; the shares look set to revive the May rally. Best-case stretch to 0.80 by the end of next month, but for now 0.56 is the immediate objective while the recent broken resistance at 0.41 holds as support.
- Empire Metals — I simplified the chart after many prior targets hit. The rising trend channel from March points to 45p by the end of next month, while staying above the recent broken resistance at 33p Multiple RSI 50 bounces and an overbought reading now — yesterday’s gap up through resistance, if held, is a strong signal.
- Ferrexpo — Despite potentially positive Russia–Ukraine talk noise, the stock hasn’t rallied much yet (still under 80p). We have an RSI 50 rebound and a V-shaped bull flag. An end-of-day close through 60p would open a move toward 71p and the 200-day moving average. Keep the right side of 50p on a close basis for the setup to remain intact.
- Goldstone Resources — Recent selloff looked overdone and felt like an exhaustion gap down followed by tentative recovery. Bullish divergence is present (lower price lows but higher RSI), suggesting enough energy to fill the gap up to 0.52p in coming days while holding above the mid-30 pence area (roughly 0.35).
- Guardian Metal— There was news that Stanley Denmiller bought shares from Power Metal; reaction has been muted so far (shares only up 10%). The 50-day sits at 57p; above that I’m targeting the top of the spring 2024 channel around 82p as early as the end of next month. RSI 57, a decent place for further gains.
- Mila — Decent rebound after bouncing off the 200-day moving average, with RSI back over 50. I’m waiting for an end-of-day close through the 50-day to set up a potential retest of the June highs by the end of next month — a punchy call, but momentum is improving.
- OPG Power Ventures — Sharp, rising trend channel with support above the 50-day line and RSI 50 rebounds. Target 11 pence by the end of next month while price holds above the 50-day (currently around 7.75 pence).
- Power Metal — Despite raising an extra £13m from selling Guardian Metal shares (which itself only pushed Power Metal up 10%), I expect a move to the top of the falling channel 18p in coming days. On a close-basis keep the right side of 15p pence for the bullish case.
- Shield Therapeutics — We’ve already hit the target near 9.75 pence. The next level is the upper parallel around 10.12 pence, which I expect by the end of next month while remaining above the September resistance just under 6 pence on a close basis.
Key technical themes to watch
- Trend channels: Several markets (DAX, Dow, FTSE, many small caps) are navigating rising channels — watch the tops for potential resistance and the bottoms for support.
- 50-day vs 200-day moving averages: The 50-day remains pivotal for short-term structure; the 200-day rising back above 100k for Bitcoin is a notable development.
- RSI 50 rebounds and divergences: RSI holding above 50 or rebounding through 50 has been a helpful leading indicator for many names. Bearish divergences (price higher highs but RSI lower) caution against runaway rallies.
- Gaps: Gaps through resistance (and whether they hold) have proved to be strong signals, particularly in small-cap setups.
Conclusion
Overall the technical backdrop is constructive across many markets, but there are clear levels to respect. For the indices, clears above the major resistance lines (FTSE 9,330, DAX 24,400, Dow 45,000) would confirm the next leg higher toward channel tops by the end of next month. In crypto and commodities, watch the 50-day and RSI behavior for confirmation. For the small caps I covered, each has a defined trigger and support level that will determine whether the bullish case stays intact.
“”If we get clear daily closes above these resistance lines, the path toward the next channel tops looks reasonable — but respect the 50-day and RSI signals.” — Zak Mir”
I’ll be back with more chart updates tomorrow. Keep an eye on those levels and trade with defined 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.
