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, 80 Mile, Genflow, Itaconix, Medpal, Novacyt, Renalytix, Serval, Synthomer.
The market has been painfully quiet, helped by the US Labour Day holiday, but some useful technical setups are still taking shape. The key theme across the major indices is constructive price action as support levels hold.
In crypto, Bitcoin and Ethereum remain range-bound but are showing the ingredients for an upside break. Gold is testing a critical support area, while crude oil continues to edge towards the top of its channel. Among the smaller shares, several charts are progressing from one target to the next on the back of encouraging news flow.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: 10,860 Is the Immediate Breakout Level
The FTSE 100 is tucked just below late-July resistance at around 10,850 to 10,860. The important signal would be an end-of-day close above that area.
A sustained move through 10,860 would open the door to the top of the rising trend channel that has been in place since March. That points towards 11,100 by the end of next month.
On the downside, the first support zone sits near 10,700. Below that, there is the 50-day moving average near 10,732, followed by the more substantial support around the 200-day moving average and previous July support near 10,400.
At this stage, a prolonged move below 10,700 does not look like the preferred scenario. The Relative Strength Index, or RSI, is around 53, which keeps it on the positive side of the neutral 50 level. For more context on how this indicator is commonly used, see Investopedia’s guide to the RSI.
DAX: Holding Above the Rising 50-Day Line
The DAX is managing to bounce above its rising 50-day moving average, which is the main positive feature of the chart. As long as that support remains intact, the bias is for further progress towards the top of the channel at around 26,700 by the end of next month.
This has been a slow-moving market, and the RSI is less convincing than the price chart. It has failed around the neutral 50 area and is drifting lower, so there is a reason to remain cautious.
There is still an unfilled gap to the upside, and the rising price structure supports the bullish case. A move through 26,200 would offer a clearer upside confirmation. More importantly, the 50-day line at approximately 25,741 is the level to monitor.
Bitcoin: Golden Cross Within a 75,000 to 82,000 Range
Bitcoin remains in its range, so there is not much to get excited about until price breaks out. The current trading band is roughly 75,000 to 82,000.
The positive development is a fresh golden cross, where the shorter moving average moves above the longer-term average. In this case, it helps underpin the constructive medium-term view.
A break above 82,000 would target the top of the broadening triangle from February, with potential towards 93,000 by the end of next month.
Ideally, Bitcoin stays above the top of the recent gap near 72,000. In a weaker scenario, price could drift back towards the 50-day and 200-day moving averages just below 70,000. A golden cross can be a useful trend signal, although it is always worth treating it as one piece of evidence rather than a guarantee. Read more about golden crosses.
Ethereum: A Break Above 2,570 Could Trigger the Next Leg Higher
Ethereum is also consolidating in a range, currently between approximately 2,350 and 2,570. The obvious trigger is a break above 2,570.
That would suggest a move towards the top of the rising trend channel that began in February, targeting around 2,900 by the end of next month. It could happen earlier, but that is the current chart-based expectation.
On the downside, the preferred outcome is for Ethereum to remain above former resistance near 2,170, which dates back to May. The 50-day and 200-day moving averages have recently completed a golden cross, adding to the constructive technical picture.
Gold: A Crucial 4,380 to 4,400 Support Zone
Gold is struggling to remain inside a steep rising trend channel, which makes the setup more demanding. The floor of that channel sits around 4,380.
The RSI is sitting right around neutral 50 and close to its own uptrend support. That makes the 4,380 to 4,400 region an important potential buying area, provided the market can hold there.
If the 4,380 level breaks, the next support to watch is the rising 50-day moving average near 4,254. On the upside, the initial recovery target is the rising 200-day moving average at around 4,536.
WTI Crude Oil: Still Pressing the Top of the Range
WTI crude oil remains towards the top end of its established range and is edging through previous July resistance above $94.
As long as price holds above the old August resistance around $88, the target is the top of the channel near $101 to $102.
The notable point this time is that rising oil prices have not hit equity indices as heavily as they have in previous periods. That resilience is worth noting while crude continues to push higher.
Small-Cap Share Charts
- 80 Mile: Recovery After Last Month’s Pullback: 80 Mile has recovered surprisingly well after the sharp pullback last month, returning to the area seen during July and August. Recent merger-related news has been the main driver, so the fundamentals have temporarily overwhelmed the usual technical picture. Technically, the key remains the 200-day moving average around 0.82p. While the shares stay above that level, the target is 1p. The RSI has also bounced through 50, which supports the positive view.
- Genflow: Hold Above 2.55p for 3.6p Potential: Genflow has been notably strong and has received further news. The main level to hold is the former target area around 2.55p. An end-of-day close above 2.55p would support a fresh move higher towards 3.6p. Both the 50-day and 200-day moving averages are rising, which is encouraging. The worst-case technical scenario would be an intraday fill of the gap before the shares resume their move higher. So far, the wider chart structure remains constructive.
- Itaconix: Above 193p, the Next Target Is 264p: Itaconix has had plenty of coverage and has performed well. The shares are above a previous target near 193p, which is now the key level to defend. While above 193p, the next target is the upper trend line near 264p. That is the end-of-next-month target, although the pace of the move means it could potentially arrive before the end of this month.
- Medpal: Above 6p, Looking Towards 10p: Medpal produced a strong update and the chart remains on an upward path. The shares are trading around the previous target area near 6p. Above 6p, the next objective is 10p by the end of next month. There may also be a further update during the first week of October, offering an indication of how September has developed.
- Novacyt: Consolidation Between 41p and 48p: Novacyt is consolidating between approximately 41p and 48p. The setup requires a break above the top of that range. A bullish break, supported by the RSI bouncing from the neutral 50 level, would target the top of the channel at around 60p by the end of next month. Ideally, the shares remain on the right side of the rising 50-day moving average, which is sitting just below 40p.
- Renalytix: Moving From Target to Target: Renalytix has continued to work well and has reached its third target around 5.5p. Above that level, the next target is roughly 7.6p to 7.7p by the end of next month. The preferred structure is for the shares to stay above previous resistance around 4.6p as they work towards the wider 7p to 12p zone.
- Serval: Strong Follow-Through Towards 45p: Serval has seen good follow-through after yesterday’s move, helped by a new RNS announcement. The target had been 45p by the end of next month, although the current momentum means that level may be reached sooner. The important support area is now 30p, which acted as resistance during the decline in April. Holding above 30p would keep the bullish setup in place. The move appears to be building towards the company’s maiden mineral resource estimate, although that is firmly in the territory of doing your own research.
- Synthomer: Rising Moving Averages Support the 136p Target: Synthomer has been rising above its 50-day moving average throughout the month, with that average currently around 94p. As long as the shares remain above 94p, the target is the top of the range and rising trend channel near 136p by the end of next month. The RSI has bounced around the 50 level, while both the 50-day and 200-day moving averages are rising. That creates a golden-cross-style backdrop and leaves the chart looking decent.
The Levels That Matter Most
The broad market picture is still constructive, but the key is to stay disciplined around support and breakout levels. A rising channel, a moving-average bounce, or an RSI recovery can all support the case for higher prices, but the levels have to hold.
- FTSE 100: A close above 10,860 targets 11,100, while 10,700 is first support.
- DAX: The rising 50-day average near 25,741 remains the key technical marker.
- Bitcoin: A move above 82,000 could open a path towards 93,000.
- Ethereum: A break above 2,570 would bring 2,900 into view.
- Gold: The 4,380 to 4,400 area is the immediate line in the sand.
- WTI crude: Staying above $88 keeps the $101 to $102 target alive.
In the smaller-cap space, the clearer setups remain those where price has already moved through an old target and held above it. That applies particularly to Genflow, Itaconix, Medpal, Renalytix, Serval and Synthomer.
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.
