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, Gold, Alien Metals, Eurasia, Eagle Eye, Fusion Antibodies, Gfinity, Smarter Web, Tower Resources, and ValiRx.
Major Indices Overview
FTSE 100
The FTSE 100 is currently demonstrating robust support, holding above last month’s resistance level of 8,902 and the floor of a rising trend channel established since early May. The critical support zone is around 8,900, and as long as the market remains above this level, there is optimism for a move towards 9,040 by the end of July.
Looking further ahead, the FTSE could challenge the top of the rising trend channel near 9,230 by the end of August. The downside risk involves a potential test of the 50-day moving average at 8,760. However, the market’s ability to find support above this line during last month’s dip suggests underlying strength.
DAX
The DAX continues to hold well above its 50-day moving average, a level it hasn’t breached since June 23rd. While an intraday touch of the 50-day line at approximately 23,800 remains possible, the index maintains a positive bias with a relative strength index (RSI) comfortably above the neutral 50 mark.
With this momentum, the DAX is eyeing the 25,000 mark, which corresponds to the top of a one-year rising trend channel dating back to spring 2023. Support is expected not to fall below 23,600, reinforcing the current bullish stance.
Dow Jones
The Dow appears to have found resistance around the 45,000 level, with solid support at 44,000. Should the index dip below this support, look for it to test the initial June resistance near 43,100, close to the convergence of the 50-day and 200-day moving averages.
Notably, these two averages recently formed a golden cross—a typically bullish technical event—though the market’s muted reaction tempers immediate optimism. The RSI remains above 50 at 56, suggesting cautious optimism but a preference to see the Dow sustain levels above 44,000 for confirmation of strength.
Cryptocurrency and Precious Metals
Bitcoin
Bitcoin surged towards 123,000 recently, but current support is holding firmly above 115,000. A minor dip to the old May floor around 112,000 is still within expectations, providing a potential safety net.
Looking ahead, Bitcoin could reach the upper boundary of its rising price channel from April-May 2024, near 126,000, before the end of July. The rising 50-day moving average adds further support, reinforcing a cautiously bullish outlook.
Gold
Gold remains in a consolidation phase following significant gains from January to April. The floor of its current channel is around 3,300, with recent support near 3,220 acting as a critical downside level.
Resistance at 3,330, stemming from April’s highs, must be overcome to target a potential rise towards 3,800 by the end of August. However, the RSI’s dip below 50 and failed attempts to hold above the low 50s suggest caution, as downside pressures could push gold back toward the 3,220 support zone.
Stock Spotlight: Selected Shares to Watch
Alien Metals
Alien Metals experienced a gap up earlier this month, followed by a gap fill rebound and another breakout above its 50-day and 200-day moving averages at 0.088 pence. As long as the stock remains above this level, the next target lies near the top of its recent range at 0.125 pence by the end of July.
The RSI shows a modest rebound around 50, supporting the potential for further upside within a rising trend channel. Optimistically, the stock could reach 0.17 pence by the end of August, but a drop below 0.08 pence would be a warning sign.
Eurasia
Following recent regulatory news announcements (RNS), Eurasia is holding above its rising 50-day moving average at 4.17 pence. Consolidation above the 5 pence level is crucial, as previous attempts to break this resistance have failed.
A weekly close above 5 pence could propel the stock towards the top of its channel at 8 pence by late August. Both the 50-day and 200-day moving averages are trending upwards, lending a positive technical backdrop.
Fusion Antibodies
Fusion Antibodies has been in a prolonged consolidation phase since peaking in January, frustrating shareholders. However, it maintains a rising trend channel anchored by the 50-day and 200-day moving averages near 6.3 pence.
A breakout above 6.5 pence, which has already occurred, opens the door to an initial target of 7.5 pence by the end of July and possibly 11 pence by September. Support must hold above 6 pence to sustain this optimistic trajectory.
Gfinity
Gfinity has been consolidating for some time but recently broke through resistance at 0.80 pence, signaling a potential move higher. The stock aims for the top of its rising trend channel dating back to October, with a best-case target of 0.15 pence by the end of August.
Key hurdles include the May spike near 0.10 pence, but rising 50-day and 200-day moving averages and a double bounce of the RSI around 50 suggest the momentum is building for further gains.
Smarter Web
Despite Bitcoin’s strength, Smarter Web faces challenges in maintaining support. The June uptrend line sits around 284 pence, while the low from yesterday was 287 pence. A close below 287 pence could trigger a decline towards the 200 pence area.
That said, the RSI remains just above 50, indicating the possibility of a bounce in the mid-280s. The situation warrants close monitoring for signs of breakdown or recovery.
Tower Resources
Tower Resources has exceeded expectations with a strong run-up and an approaching golden cross between its 50-day and 200-day moving averages, likely within the next week. Multiple RSI bounces at the neutral 50 level support continued strength.
Initial targets include 0.43 pence, with potential to reach the top of its range above 0.50 pence + by the end of August. It is important to maintain levels above 0.35 pence, which acted as resistance in late June.
ValiRx
ValiRx caught attention recently after a gap higher and a bounce off the floor of that gap and its rising 50-day moving average. Strong bullish candles in recent sessions suggest momentum is building.
The stock’s best-case target is 1.14 pence by the end of August, provided it holds above early July resistance at 0.61 pence. The stop-loss level to watch is near 0.53 pence at the 50-day moving average.
Conclusion
The markets are showing a mix of cautious optimism and consolidation, with key support levels holding across major indices and cryptocurrencies. Technical signals such as rising trend channels, golden crosses, and RSI patterns provide a roadmap for potential upside moves, while also highlighting critical downside risks to monitor.
Selected stocks on the bulletin board offer exciting opportunities, especially those successfully navigating resistance levels and maintaining positive momentum in their moving averages and RSI readings.
Staying attuned to these technical cues will be vital as we approach the end of July and look forward to August’s market developments.
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.
