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, Arc, Ajax, Defence Holdings, Cadence, Empire Metals, GCM, IMC, KR1, Nuformix, Sabien, Thor Explorations, Zenith.
The market mood has turned more cautious across the major indices, with the FTSE 100, DAX and Dow all losing some of their early-month momentum. The more encouraging setups are currently in selected commodities, particularly crude oil, while Bitcoin and Ethereum are trying to improve after a long spell of inactivity.
Among the smaller shares, there are several technical recoveries worth monitoring. The common thread is simple: hold above key moving averages and recent breakout levels, and the upside targets remain in play.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: Still a Sell Into Strength Below 108.20
The FTSE 100 has disappointed after moving down towards the lower boundary of its rising trend channel. The break below 108.20 produced a sell signal, and although the market may find support around 106.80 at the channel floor, there is still a risk of a further move lower.
The next important support comes from the rising 50-day moving average at 106.35. The index has not traded meaningfully below that average since early last month, so a test of the level would fit the current technical picture.
The Relative Strength Index is also unhelpful at the moment. With RSI around 46 and below the neutral 50 level, the market has produced a bearish failure below neutral territory. That normally supports the case for downside continuation.
- Resistance to reclaim: 108.20
- Initial support: 106.80
- Deeper support: 106.35 at the 50-day moving average
- Current stance: Sell into strength while below 108.20
DAX: The Gap Down Is Becoming a Meaningful Sell Signal
The DAX is also starting to peter out. The gap down remains open, and that is increasingly looking like a respectable sell signal.
For the bulls, the key issue is whether the market can remain on the right side of 26,000. While the gap remains below that level, it is difficult to make a convincing bullish case. The more logical destination is the late July resistance area around 25,600, with the 50-day moving average rising just beneath it.
A test of the mid-25,000s before month end would make technical sense if the open gap is not closed.
Dow: April Channel Support Could Be the Next Destination
The Dow has given back its initial gains for the month. The floor of the gap around 53,300 was tested near 53,256, which prompted a modest gap-fill rebound.
However, if the index remains below 53,300, the downside risk is a move towards the floor of the rising trend channel from April. That area coincides with the 50-day moving average at approximately 52,400.
RSI remains above neutral 50, but there is an RSI uptrend line close to that level which now needs testing. That suggests the market may weaken further over coming sessions before finding a more meaningful base.
- Near-term resistance: 53,300
- Potential downside target: 52,400
- Technical focus: April channel floor and 50-day moving average
Bitcoin and Ethereum: Better Setups, But Still Very Slow
Bitcoin Holds Above Its 50-Day Moving Average
Bitcoin has been remarkably quiet, but the chart is beginning to look better. The 50-day moving average is rising, and RSI has returned above the neutral 50 level.
As long as Bitcoin remains above the 50-day average at 63,800, the probability improves for a break above the resistance line dating from October. A move towards the 200-day moving average at 68,975 would then become the principal upside target.
The key downside level remains 61,000, which marks initial July support. A sudden market reversal could drag the price back towards that area, but the current setup is more constructive than it has been for some time.
Ethereum Needs Momentum to Match the Setup
Ethereum has the right technical ingredients, but it has lacked momentum. The price has held above a rising 50-day moving average at 1,856 for more than a month, which is a solid foundation.
Provided that support remains intact, the next objective is the 200-day moving average around $2,001. That remains the favoured target before the end of the month, even if the pace of the market has been painfully slow.
- Bitcoin support: 63,800, then 61,000
- Bitcoin upside target: 68,975
- Ethereum support: 1,856
- Ethereum upside target: $2,001
Gold: A Bull Flag Still Appears to Be Forming
Gold had a promising setup earlier in the week, although the move has not yet fully delivered. The chart still resembles a mid-move consolidation, or bull flag, with support around 43.10.
The market has dipped towards 42.40 over the past two sessions, which is disappointing, but the broader picture remains constructive. RSI is just below 60, which is a favourable area for a bullish continuation, while the 50-day moving average continues to rise.
If this is indeed the bottom of the range, gold should be capable of moving towards its 200-day moving average near 45.09 before month end.
WTI Crude Oil: Bullish While Above $80
Crude oil is one of the more interesting charts. The market has been working within a falling trend channel, with the top of that channel around $87. That is the immediate target, and there is also a gap to fill in the same area.
An end-of-day close above $87 would strengthen the recovery case considerably and bring the July resistance zone at $93 to $94 into focus.
On the downside, crude needs to remain above $80 and ideally above the 50-day moving average at $78.48. That moving average is still falling, but RSI at 58 is signalling continued upside potential. There is also a possible rising trend channel developing, which could eventually point back towards the $100 area.
- Immediate upside target: $87
- Breakout target: $93 to $94
- Key support: $80
- Deeper technical support: $78.48 at the 50-day moving average
SpaceX: Range Trading Between 140 and 150
SpaceX has gone sideways, but there are some modestly positive signs. The price closed above its 50-day moving average near 143, which helps the near-term outlook.
The market is effectively contained within a 140 to 150 range. Holding above 140 would leave room for a move towards 156 and the 200-day moving average by month end. A break below the 138 to 139 region, however, would suggest a move down towards 130.
With RSI at 55, the balance is currently tilted slightly in favour of the upside while 140 holds.
Small-Cap Share Charts to Watch
- Arc Minerals: A More Credible Break Above 0.7p: Arc Minerals has broken recent resistance around 0.7p. While the shares remain above that level, the next target is 0.90p, potentially by the end of next month. Both the 50-day and 200-day moving averages are rising, which gives the setup more credibility than many prior rallies. The key level to protect is the 50-day moving average at 0.61p.
- Ajax: Deal-Making Rally Meets Major Resistance: Ajax enjoyed an upside flurry on deal-making news and is now approaching resistance dating back to January. A close above 6p would be positive, but a move through the 200-day moving average at 6.45p would be the cleaner breakout signal. If that occurs, the shares could move back towards 9p by the end of next month. The 50-day moving average has started to rise, adding support to the recovery case.
- Defence Holdings: A Recovery Target Near 1p: Defence Holdings responded positively to its letter to shareholders, although the share price still has substantial ground to recover. The old support area around 1p is the initial target, even if the shares later retreat. The main requirement is to remain above the previous session’s high at 0.8p. That would keep the recovery structure intact.
- Cadence: Back Above the 50-Day Moving Average: Cadence appears to be back in business after gapping above the 50-day moving average at 5.49p. While the shares remain above that average, a retest of the May resistance near 8p is possible by the end of next month. The chart is straightforward: the 50-day line is the level that matters.
- Empire Metals: A Channel Break Could Open 63p to 64p: Empire Metals received an upgraded mineral resource estimate, and the share price has responded well. An end-of-day close above 50p, the top of the rising trend channel from January, would signal a fresh upside leg. The upper parallel of that channel points towards 63p to 64p, potentially as soon as the end of next month. The initial market response suggests that the news has been well received.
- GCM: Can It Hold on to the Gains?: GCM had its sharp “Man from Del Monte” moment earlier in the week and has managed to retain most of the advance. The key support is the previous day’s low near 9.5p. As long as that level holds, another move higher remains possible, with 14p to 15p representing the upper boundary of the broadening triangle that has been developing since around this time last year.
- IMC: Above the 200-Day Line, With 2p the Best-Case Target: IMC continues to make progress above its 200-day moving average at 1.13p. Both the 50-day and 200-day averages are rising, which is the sort of alignment that technical traders like to see. The first target is 1.30p. The best-case scenario is a move towards 2p by the end of next month, provided the shares remain above the 200-day line.
- Ithaca: Oil Strength Could Help a Move Towards £3: Ithaca is not normally the first name on the list, but its chart is becoming interesting. Recent resistance sits around 261p, and an end-of-day close above that level could open the way towards the top of the channel near £3. A stronger oil price would obviously help. The RSI has also rebounded from the 50 level, but the shares need to hold above the 260p area for the bullish case to remain intact.
- KR1: A Potential End to the Bear Run: It may be too early to call the bottom in KR1, but the shares have broken recent resistance around 10.5p. Above that level, the minimum target is 12p. A convincing move through 12p would make a stronger case that the bear run is ending and could put 15p in sight by the end of next month. An end-of-day close above the blue 50-day moving average would be particularly helpful.
- Nuformix: Good News, But the Pattern Needs to Change: Nuformix has released positive candidate news, but the share price has a history of producing brief spike days before fading again. That makes it important to remain alert to whether the move can sustain itself. While the shares remain above the 50-day moving average at 0.17p, June resistance at 0.24p is the potential upside target.
- Sabien: A Strong Candle Points to a Possible Turning Point: Sabien is trying to build on the prior session’s rally, and the latest candle is strong. A break above 4.1p could lead to a move towards 6p and the 200-day moving average by the end of next month. The chart is beginning to look like it may have reached a turning point.
- Thor Explorations: Second Attempt at a January Resistance Break: Thor Explorations has broken resistance around 58p for a second time. The old saying is that second time lucky, and that may apply here. Holding above 58p would target 70p and the 200-day moving average, potentially by the end of next month or sooner. The company is generating cash, and the chart is beginning to reflect that strength.
- Zenith: Aiming for 5.5p Above the 50-Day Line: Zenith is attempting to recover between its 50-day and 200-day moving averages. The important level is the 50-day average around 4.1p to 4.5p. Above that area, the target is the top of the rising trend channel near 5.5p. That move could arrive by the end of next month, or earlier if the shares can gather momentum.
The Levels That Matter Most
The broad market picture is less convincing than it was earlier in the month. The FTSE 100, DAX and Dow are all vulnerable unless they reclaim their key resistance levels, while crypto remains constructive but lethargic.
Gold still has the structure of a bull flag, and WTI crude oil looks the most compelling major-market recovery candidate as long as it stays above $80. In the small-cap space, the strongest technical setups are those already holding above rising 50-day and 200-day moving averages, particularly Arc Minerals, IMC, Cadence and Thor Explorations.
The next few sessions should reveal whether these support levels produce fresh upside momentum or whether the broader weakness in the indices continues to weigh on risk appetite.
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.
