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, WTI Crude Oil, Bradda, Cadence, Invinity, Mercantile Ports, Orosur, Proteome, Seeing Machines.
Midweek price action has been a bit of a mixed bag, but there are still some clear technical levels worth focusing on. Across the major indices, crypto, commodities and a handful of small caps, the theme is fairly consistent: several markets are trying to stabilise, but many still need proper confirmation before the upside can be trusted.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100: bounce from channel support, but still needs confirmation
The FTSE 100 has produced a decent hammer candle off the floor of the rising trend channel in place since October. That support area comes in around 10,150, and the index has spent recent sessions trying to cling on around that zone.
There has been a reasonable bounce, and in truth it is a little more impressive given that oil has not rolled over yet. Even so, this is not yet a fully convincing recovery.
The key level now is the 50-day moving average at 10,347. An end of day close back above that would open the way for a move towards recent resistance around 10,500.
For now, that looks like the realistic upside limit. The reason for caution is simple enough: the RSI is still below the neutral 50 level. To improve the picture properly, the market needs:
- Price back above the 50-day moving average
- RSI back above 50
Until both happen, this still looks more like a recovery attempt than the start of a sustained leg higher.
DAX: volatile, but the glass is half full
The DAX has been choppy, with recent sessions featuring both gap-ups and gap-downs. At the moment it is sitting close to the 200-day moving average near 24,100, which is broadly where support was expected to emerge.
On the downside, the more important safety net is the 50-day moving average at 23,732. That is the area to keep an eye on if current weakness extends.
If the market is going to shake off the present negativity, it really needs to reclaim the old April resistance zone around 24,800. A move through there would do a lot to repair the technical damage from the recent volatility.
The RSI is sitting right on 50, which keeps the setup finely balanced. For that reason, the glass is still half full rather than half empty. It is not a runaway bull case yet, but it is not broken either.
Dow Jones: trend support still holding
The Dow remains one of the more constructive charts, provided it can continue to hold the uptrend line drawn from the end of March. It may look a slightly obscure line on first glance, but price is respecting it, and that matters.
As long as the market stays above that support, there is still scope for a move towards the November resistance time projection at 52,500 by the end of next month.
Of course, that upside case assumes the broader geopolitical backdrop, especially the Iran situation, is resolved in a peaceful way. That is an important caveat because macro headlines are still capable of swamping chart setups.
Technically, the chart remains constructive:
- The 15-day and 20-day moving averages are both rising
- Recent price action produced a hammer-type candle
- Trend support is still intact
There is an interesting divergence here as well. The Dow is behaving more positively than oil would normally suggest. That may be a warning, or it may be telling us that risk appetite is stronger than feared.
Bitcoin: still fighting with the 200-day moving average
Bitcoin is still struggling to force a clean break above the 200-day moving average. There has already been one attempt, and for now that effort has failed, although the market is having another go.
Recent support has come in around 79,000, but the key trigger for a stronger recovery is an end of day close above 82,200 and above the 200-day line.
If that happens, the next target is the late January resistance area in the 90,000-plus region.
On the downside, the current worst-case scenario still looks like a test of the 50-day moving average at 74,600.
The encouraging feature is that the uptrend line in the RSI window is still supportive. So although the market feels awkward and a bit sticky around the 200-day average, the broader technical structure has not entirely given way.
Ethereum: lower in the channel, but support still in play
Ethereum looks weaker than Bitcoin and is sitting much lower within its rising trend channel. That makes the setup a little more cautious, but not necessarily bearish.
The upside levels to watch are:
- 2,560 at the top of the rising channel
- 2,638 at the 200-day moving average
That is the best-case scenario for now. If the market cannot build upward momentum, another test of support may be needed. The obvious levels beneath are:
- 2,246 at the 50-day moving average
- 2,070 at the floor of the rising channel
The more likely near-term path is that Ethereum holds around the 50-day line and then gradually works its way back towards the top of the channel over the next week or two, or perhaps over a few weeks.
Gold: disappointing and still capped below the 50-day line
Gold continues to underwhelm. The market managed to touch the 50-day moving average at 4,751 and then fell back, which is not what bulls wanted to see. In practical terms, that rejection acts as a minor sell signal.
For now, the important support level is the uptrend line from October, which comes in around 4,530 to 4,550. While the market remains below the 50-day average, that support zone is the main level on the downside.
If gold can break higher, the best upside target remains the resistance projection from the January trend line at 4,950.
The RSI is sitting around 50, which does not offer much guidance. So at the moment this is a market trapped in the middle, and until it reclaims the 50-day average decisively, it remains vulnerable to further frustration.
WTI crude oil: bounce still alive above $99
WTI crude continues to build on the recent RSI 50 bounce and the rebound from what now looks like a bear trap below the 50-day moving average, currently near $96.
As long as crude stays above $99, the chart still points towards $110 and a retest of late April resistance.
The RSI is around 54, which keeps the market in decent shape for further gains even if price is not moving aggressively just yet.
The bullish argument starts to weaken on an end of day close back below $99, which had been broken resistance and now needs to hold as support.
Small-cap stock charts
Bradda Head Lithium: Bradda has delivered on the initial setup. The first target at 2.15p has been achieved, and the next level is around 3.1p. If the shares can get above 3.1p, the chart then points to a July 2023 resistance line projection up to 5p, potentially as soon as the end of this month.
So the roadmap here is straightforward:
- First target met at 2.15p
- Second target at 3.1p
- Above 3.1p opens the way to 5p
Cadence Minerals: Cadence looks as though it has finally started to move properly. The recent rally has been close to vertical, and there now appears to be a small bull flag forming with a base around 7.25p. The shares are approaching the 8p target. An end of day close above 8p would suggest another leg higher, with scope towards 11p by the end of next month. The only development likely to delay that upside view would be a move back below the old September resistance at 6.25p.
Invinity Energy Systems: Invinity has not been in focus for a while, but the chart has improved significantly. The shares have broken a resistance line from July and pushed through the 200-day moving average with a strong gap higher. That 200-day line sits at 20p. Above 20p, the next target is 31p by the end of next month. The setup gets even more interesting if the 200-day moving average starts rising to join the already rising 50-day line. Recent candles have been strong, so for now the message is simple: stay above 20p and 31p remains on the cards.
Mercantile Ports & Logistics: Mercantile Ports remains a rocky chart, but there has been a useful improvement. The shares are back above both the 50-day and 200-day moving averages, with the 200-day line coming in at 0.72p. The initial target is 1.1p, which corresponds to the top of the falling trend channel that has been in place since this time last year. That is probably enough to aim for at this stage. The RSI has pushed above the neutral 50 level, which is encouraging, but this still looks like a recovery within a previously difficult chart rather than a licence to get carried away.
Orosur Mining: Orosur is still bogged down in the low 20s and has not yet delivered the breakout the chart has been threatening. The main level to watch is resistance at 24p. If the shares can clear 24p on this attempt, especially with the 200-day moving average rising, then the chart should open up towards the February gap fill at 34p. That target could potentially come into play later this month, but first things first: the market has to get through 24p.
Proteome Sciences: Proteome remains a messy chart, although it is starting to look less messy than before. The shares have bounced from the 50-day moving average, which is now beginning to rise. The target is the top of the falling trend channel from this time last year, which points to as high as 2.9p by the end of this month. The 200-day moving average is still acting as resistance, so this is not a clean breakout yet. However, the RSI rebound above 50 is a positive sign, and the longer the shares stay above 2p, the better the setup looks.
Seeing Machines: Seeing Machines is one of the cleaner-looking charts in the list. The shares have bounced above rising 50-day and 200-day moving averages, which gives the chart a strong technical feel. The price is also back above the old February gap at 4.1p. The first target is 5.1p, which marks the top of the recent range. Beyond that, the upper parallel of the rising trend channel points to 6p plus by the end of next month, particularly while the shares remain above the broken February resistance around 4.5p.
Final chart view
The broad message across the board is that plenty of markets are trying to turn higher, but several still need technical confirmation before the bullish case becomes more robust.
The most important levels from here are fairly clear:
- FTSE 100 needs to reclaim the 50-day moving average and get RSI above 50
- DAX needs to retake 24,800 to escape the recent churn
- Dow remains constructive while the March uptrend line holds
- Bitcoin needs a close above 82,200 and the 200-day average
- Ethereum needs to hold support and work back towards channel resistance
- Gold remains frustrating below the 50-day line
- WTI crude keeps the bullish rebound alive while above $99
Among the stock charts, Bradda, Cadence, Invinity and Seeing Machines stand out as the more constructive setups, while Orosur and Proteome still need a little more work, and Mercantile Ports remains one to handle with care.
For now, it is a market environment that rewards discipline. Respect the support levels, wait for proper closes through resistance, and do not assume every bounce is automatically the start of a major trend.
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.
