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, Amigo, Amala, Aminex, ECR, Great Southern, Galileo, Neo, Pebble Beach, Virgin Wines.
Markets are finishing the year in a cautiously upbeat mood. Several major indices are consolidating near recent resistance levels and showing technical signs that favour further gains, while crypto has been softer through the autumn. The picture is a mix of steady bulls on the big indexes, a strong performance from gold, and some interesting setups among smaller stocks.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100
The FTSE 100 has been consolidating above recent resistance around 9770. Staying above that level is the immediate priority for bulls. If there is an end of day close below 9770 the next meaningful support would be the 50 day moving average near 9671.
Upside targets are straightforward: first the psychological 10,000 zone and then the top of the channel near 10,100. Momentum indicators have shown multiple RSI 50 rebounds recently which often precede further upside, so the bias here is positive while those conditions hold.
DAX
The DAX has carved out a U shaped rebound off the 50 day line around 24,000. It has been range bound close to that level for some weeks but has cleared October resistance near 24,100.
Short term targets are record highs towards 24,700 and, in an extended move, the top of the channel around 25,600 by late January if momentum continues. The bullish case is supported by an RSI 50 rebound and a rising 200 day moving average. A deeper pullback would probably find support near the 200 day line around 23,600.
Dow Jones
The Dow is bouncing off former resistance territory close to the 48,000 zone and currently sits just under that area. The index has produced several RSI 50 plus rebounds, increasing confidence for further gains.
Near term upside target is the February resistance around 49,200 and a rounded best case of 50,000 by the end of next month, provided the market remains above the 50 day line at roughly 47,300.
Cryptocurrencies: Bitcoin and Ethereum
Crypto has had a challenging autumn. Bitcoin peaked in early October and has trended lower since. The current action is testing October resistance around 89,000. Price has shown two RSI 50 failures and looks vulnerable to a third, meaning a failure below 89,000 risks a move down to the uptrend line from September last year near 81,000.
Upside for Bitcoin would first need a convincing break above the 50 day line near 92,000, with a better initial resistance target at about 99,000.
Ethereum has been battling the $3,000 area and recently lost that level. It failed the 50 day and slipped below RSI 50 which increases the likelihood of a test of the April uptrend line near $2,870 or even a deeper retest toward November lows around $2,622 before any sustainable recovery can begin.
Gold
Gold has been one of the standout performers and has acted as a reliable store of value this autumn. Recent breakout above resistance near 4,380 projects a path to the November 2024 resistance projection around 4,700 by the end of next month if the rally continues.
Worst case for the gold bulls would be a retest of the uptrend from early November around 4,250. The current rally began after a double RSI 50 rebound in the 4,000 area, which underlines the power of clear technical signals.
Selected stocks to watch
Several smaller names are showing constructive patterns. Here are the highlights and the levels that matter.
Amigo: Cleared the breakout level at 0.55 and briefly exceeded a pie in the sky target near 0.85. The pattern is a broadening triangle and the technical trajectory suggests scope higher, possibly into the 1.20 to 1.30 pence area over time if momentum continues.
Dish: This stock has formed a coil type setup with a bullish divergence on the RSI and a gap closed buy signal. The immediate aim is an end of day close above 0.12p, which would open the way toward the October resistance around 0.16p to 0.17p. The combination of RSI 50 rebound and bullish divergence is a clear technical reason to be constructive.
Aminex: Looks ready to move after a long consolidation. The 200 day line is rising and the 50 day average should follow quickly if price keeps advancing. A move to the top of the rising channel around 2.5p could occur by the end of next month while staying above the 50 day at about 1.52p.
Galileo: Produced a sharp upside spurt and is trading above broken resistance near 0.9p. The near term target is the top of the falling trend channel around 1.1p. A sustained break through that level could lead to a move toward 1.5p to 1.6p.
NEO: The newly rejigged NEO hit its first target at 1.05p. Next level to watch is the old November resistance around 1.35p, which could be reachable by the end of next month provided support around today’s level holds.
Pebble Beach: Has staged a clear breakout and is travelling inside a wide rising channel. Conservative target for the end of next month is the top of that channel near 30p. The stock has enjoyed an RSI 50 plus rebound and rising 50 and 200 day lines, suggesting the uptrend is intact while it stays above recent support around 20p.
Virgin Wines: Shows both 50 and 200 day moving averages rising and an extended RSI 50 rebound earlier this month. Near term support sits around 54p with upside toward the channel top near 85p possible by the end of February if momentum holds.
Practical takeaways
- Confirm the level before acting. For each market check that key supports and resistances hold on a daily close.
- Watch RSI and moving averages. Multiple RSI 50 rebounds have been reliable leading indicators for upside in several markets, while failures below RSI 50 often precede deeper tests of trend lines.
- Use stops around moving averages. The 50 day and 200 day lines provide clear reference points for risk management.
- Be patient on crypto. Bitcoin and Ethereum look set for more consolidation or a deeper retest before fresh bull runs are likely.
Final thought
Overall the end of year landscape is constructive for the major indices and gold, while a handful of smaller stocks are showing promising technical patterns heading into the new year. Keep an eye on the levels noted above, respect the daily closes, and trade with clear risk controls.
Wishing calm markets and a happy Christmas.
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.
