Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are the FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, WTI Crude Oil, Bluebird, Gulf Keystone, Galileo, Haydale, Halo, IMC, London BTC, Medpal, Tungsten West, Zoo Digital.
Risk appetite is holding up rather well across the main indices and cryptocurrencies, with several charts breaking higher from consolidations. The key question now is whether those breakouts can continue into the end of next month, or whether markets need a pause before the next leg higher.
Here is the technical picture across the FTSE 100, DAX, Dow, Bitcoin, Ethereum, gold, crude oil and a selection of smaller-company shares.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: Back Above 10,820
The FTSE 100 has moved back above former support at 10,820, which puts the emphasis back on the upside. While that level holds, the next obvious target is the top of the current rising channel at 11,065.
That target could come into play by the end of next month, perhaps earlier if the current momentum continues.
On the downside, 10,820 is the line to monitor. A move back below it would bring the floor of the rising channel into focus at around 10,720. The 50-day moving average sits just below at 10,667, making the 10,720 to 10,670 zone the likely support area should there be a sudden pullback.
The RSI is around 61, which is positive without being excessively stretched. That leaves room for further gains.
DAX: Channel Breakout Remains Constructive
The DAX is outperforming the FTSE 100 at the moment. Support has arrived at former resistance around 25,900, and as long as the index stays above that level, the technical setup remains constructive.
The immediate target is the top of the rising channel at 26,650. A more ambitious move could see the index approach a projected resistance line from late January at around 27,400 by the end of next month.
The key risk level is the 50-day moving average at 25,497. The RSI has bounced comfortably above the neutral 50 area, supporting the case for a decent push higher.
Dow Jones: Rising 50-Day Average Provides Support
The Dow has bounced from a rising 50-day moving average at roughly 52,640. That is an encouraging development, particularly after a strong daily candle that opened near its low and closed near its high.
There is resistance around 53,800. A convincing end-of-day close above that area would improve confidence in the bullish setup.
Above 53,800, the next channel target is around 55,500. If the Dow reaches the channel top quickly, a steeper projected target near 56,300 could be possible by the end of next month.
The RSI has recovered from below 50 to just under 54, which is another sign that momentum is improving.
Bitcoin: Bull Flag Breakout Targets 82,000 and Beyond
Bitcoin has had a strong few sessions, breaking out from a bull flag consolidation. The prior resistance area around 79,000 has been cleared, opening the way towards 82,000, where resistance was seen in May.
The larger chart pattern is a broadening triangle that has been developing since February. In the best-case scenario, Bitcoin could test the top of that formation near 93,000 by the end of next month.
It may need further consolidation before making that larger move. Ideally, Bitcoin holds above 78,000, which was resistance during the previous decline and should now provide support.
Both the 50-day and 200-day moving averages are rising and heading towards a potential golden cross within the next week or two. A golden cross occurs when the shorter-term moving average rises above the longer-term average, often reflecting improving medium-term momentum.
Ethereum: The Market That Signalled the Move Higher
Ethereum was already hinting that the crypto market was preparing to rise. It spent two to three weeks consolidating above a rising 50-day moving average before breaking higher.
The chart now resembles a bull flag based around 2,350. While Ethereum stays above that base, the target is the top of the rising trend channel and a February resistance projection around 2,890.
The RSI is overbought, but that is not necessarily a concern in a strong momentum move. More important is the ability to hold above 2,400, an area that acted as resistance during April and May. Former resistance becoming support would be a healthy sign for the trend.
Gold: Holding Above the 200-Day Moving Average
Gold has held onto the bulk of its recent gains despite a slight move lower on the day. The important development was the relatively easy move through the 200-day moving average at 4,519.
As long as gold remains above the former May resistance near 4,600, the focus is on further upside towards 4,900, the peak from April.
The market suffered a painful retreat after its earlier peak near 5,500, so holding above 4,600 and, ideally, above the 200-day average would help confirm that the recovery remains intact.
WTI Crude Oil: Bull Run Faces a Serious Test
Crude oil is moving lower after failing around the top of a previous gap near $87.80. It also failed at a resistance line in place since March, and that has shifted attention to the floor of the rising trend channel at $79.
The 50-day and 200-day moving averages sit close together around $78. That gives the $78 to $79 area considerable technical importance.
The longer crude remains below recent resistance above $85, the more likely it is that the earlier bull run has run out of steam. A clear break below $79, followed by a move through the 50-day average at approximately $77.95, could open the way towards August support around $74.
SpaceX: 50-Day Moving Average Is the Immediate Barrier
SpaceX is slightly bearish while it remains unable to overcome the 50-day moving average at 141.30p. The shares have failed at that line for three sessions.
An end-of-day close below 130p would weaken the chart, initially pointing towards 130p and potentially the floor of the descending channel at 121p.
The RSI remains just above the neutral 50 level, so the shares still have a chance of another push towards the 50-day average while they remain above 130p. A break above 141.30p would bring the 200-day average at 156p into view.
UK Small-Cap Share Charts
- Bluebird Mining Ventures: Rising Channel Still Points to 0.76p: Bluebird Mining Ventures remains within a rising trend channel. Peel Hunt has reduced its position, yet the share price has risen, which is one of those situations that can seem counterintuitive but does happen. While the shares remain above 0.50p, the technical target is the top of the channel at around 0.76p.
- Gulf Keystone: Breakout Above 193p Suggests a Re-Rating: Gulf Keystone has been relatively weak against the backdrop of the oil market, but the shares finally broke out shortly before the latest company update. The chart has moved above former resistance at 193p. Provided that level holds, the next target is around 201.5p. Both the 50-day and 200-day moving averages are rising. After a period in which the shares traded below 180p and looked too low, the technical picture suggests potential for a more meaningful re-rating towards the middle or upper end of the range.
- Galileo: New Porphyry Discovery Could Change the Tone: Galileo has announced the discovery of a new porphyry, a significant development for a mining business. The share price has spent years in a falling trend channel, but the news may be good enough to help it finally break free. The key upside target is the top of that channel at 0.99p. It is a punchy target, but it could become realistic by the end of next month if the shares remain above the rising 50-day moving average at 0.68p.
- Haydale: Break Above 0.31p Would Strengthen the Recovery: Haydale is showing a more bullish chart than might have been expected. The shares appear to have broken through the top of a wedge formation at 0.31p. An end-of-day close above 0.31p would be a good technical signal. Above that level, the initial target is the 200-day moving average just below 0.38p. It would be notable if the shares could get back above the 200-day line for the first time since January. The recent candlestick action has been encouraging, with several sessions opening near the lows and closing near the highs. That suggests steady buying interest.
- Halo: Accumulation Supports a Move Towards 11.75p: Halo is showing signs of accumulation. The shares have printed three strong candles and moved above a rising 50-day moving average. While Halo remains above the 50-day average at 9.86p, the target is the top of the rising channel at 11.75p. That could be achieved by the end of next month, and possibly sooner if momentum builds. The larger target is the 200-day moving average at 14p. For now, the 50-day line is the level that needs to hold.
- IMC: Bull Flag Pattern Points Towards 2p: IMC continues to make good progress. The 50-day and 200-day moving averages are both rising, and the shares have already broken through the first target at 1.35p. The current consolidation resembles a mid-move bull flag. If that pattern resolves higher, the next minimum target is around 2p by the end of next month. For background on this type of setup, a bull flag pattern typically represents a brief consolidation following a sharp advance, although chart patterns are never guarantees of future price direction.
- London BTC: Gold and Bitcoin Offer Twin Tailwinds: London BTC benefited from positive news and from the supportive moves in both gold and Bitcoin. The next technical requirement is an end-of-day close through the 200-day moving average. That would bring 2.25p into focus, followed by the main target of 2.65p by the end of next month. The bullish case remains in place while the shares stay above broken June resistance at 1.85p.
- MedPal: Dips Towards the 50-Day Line Remain Constructive: MedPal delivered a strong July trading update, and attention will naturally turn to the next update. Technically, the shares are holding above the 50-day moving average at around 3.75p. While that level continues to provide support, the target is the top of the channel at approximately 5.7p by the end of next month. Dips towards the 50-day average have been treated constructively through much of the month. The RSI is also holding above the neutral 50 level, which supports the positive momentum case.
- Tungsten West: Strong News, With 55p in Focus: Tungsten West has issued a strong announcement, with government support providing an important positive backdrop. The chart points towards the top of the channel at 55p. That target is in play while the shares remain above the floor of the latest gap at 44p. Ideally, the shares should also hold above recent August resistance at 46p before attempting the move towards 55p.
- Zoo Digital: Breakout Opens a Larger Upside Gap: Zoo Digital has made a significant breakout through the 11p to 12p area seen at the beginning of the month. That move has brought the shares close to the initial target at 17p. Above 17p, the chart becomes especially interesting. There is little obvious resistance between 20p and the larger target near 35p by October. It is an encouraging turnaround chart, and the absence of major overhead resistance could make a sustained move particularly powerful if the breakout continues.
What Matters Most From Here
The broad picture remains constructive for equities, precious metals and cryptocurrencies. The FTSE, DAX and Dow all have upside channel targets in sight, while Bitcoin and Ethereum have broken out from consolidation patterns.
Gold is attempting to establish itself above important moving-average and resistance levels. Crude oil is the major exception, with its failure near $85 to $88 putting the $78 to $79 support zone under pressure.
For the smaller-company charts, the main theme is straightforward: former resistance must hold as support. That is the key level to monitor in Gulf Keystone, Ethereum, Bitcoin, London BTC and several of the smaller-cap breakouts.
All chart levels are technical observations rather than guarantees. Price action around moving averages, former resistance and channel boundaries will determine whether these bullish setups develop further or need more time to consolidate.
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.
