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, Georgina, Gear4music, KRM22, Liontrust, Ondo, Pulsar, River Global, Segro, Thalia, Upland, and Zenith.
Markets are still very chart-led at the moment, and a few clear themes run through the price action. The FTSE 100 is trying to stabilise, the DAX looks weaker, the Dow remains constructive, while crypto, gold and crude oil all still have work to do before anyone can call a meaningful recovery.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
On the stock side, there is a mix of breakouts, consolidations and a few speculative names setting up for potentially interesting moves. The key, as ever, is to focus on support, resistance, moving averages and whether RSI is confirming the move or quietly warning that trouble is still ahead.
FTSE 100: rebound building above the 50-day moving average
The FTSE 100 has managed what looks like an RSI 50 rebound, and arguably a slightly stronger one than that. The important point is that the index is holding above its 50-day moving average, which comes in around 10,396.
As long as that level remains intact, the near-term target is the upper boundary of the falling consolidation channel that has been in place since March. That points towards the 10,540 area.
If the market can deliver an end-of-day close above that channel resistance later in the week, the next upside objective becomes much more ambitious. At that stage, the chart would begin to open up towards the top of the broader channel and potentially even record highs through 10,900.
That may sound a little optimistic, but with oil and gold both under pressure, it is not impossible.
On the downside, a move back below the 50-day line would weaken the setup, but even then the expectation is that 10,300 should provide a floor for now. There was already a sharp enough shakeout to flush out some stop losses, especially among oil bulls, so that damage may already have been done.
DAX: back under pressure below 25,000
The recent story for the DAX has revolved around 25,000, and unfortunately it still does. The problem is that instead of establishing itself above that number, the index has delivered another bull trap around resistance.
That leaves 25,000 as the key breakout threshold. Until it is cleared properly, there is still a clear risk of a drop to the lower boundary of the channel near 24,500.
That downside had already been on the radar, but the divergence with the FTSE is now more obvious, and the RSI slipping below the neutral 50 level adds to the bearish case.
If 24,500 gives way, the next major support area would likely be the 200-day moving average around 24,200.
Dow: still constructive while old resistance becomes support
The Dow is in better shape. Former resistance around 51,500 is now acting as support, which is exactly what bulls want to see.
While the index remains above that level, the near-term target is the top of the rising channel from April, near 52,300. If that breaks in the days ahead, the chart points towards 53,800 by the end of next month, based on a projected resistance line stretching back to November.
RSI is also in a relatively healthy position, sitting just above 60.
If the market suddenly loses its footing, the worst-case area for now looks to be around 50,300, where the 50-day moving average and the lower edge of the channel come together.
Bitcoin: multiple RSI failures leave downside risk open
Crypto remains under pressure, and Bitcoin has gone from looking shaky to looking worse. After briefly pushing above 65,000 at the start of the week, the market has failed more convincingly.
That failed move now makes a retest of the 59,000 support zone from February and June look highly likely.
There is also a growing risk of a move down to the lower edge of the narrower channel around 55,000, even if the market eventually bounces from there.
The bigger problem is RSI. There have been repeated failures below the neutral 50 mark, and the market still is not oversold. That means there is room for further weakness before any technical exhaustion sets in.
In practical terms, that leaves scope for roughly another 6,000 points of downside from current levels, or about 10%.
Ethereum: same pattern, different numbers
Ethereum is tracing out a very similar pattern to Bitcoin. The market failed around the old February resistance area, roughly 1,753 to 1,780, and that rejection now puts the focus back on lower support.
The first main level to watch is around 1,515. If that fails, the chart suggests a deeper move towards the floor of the broader channel, which currently points to around 1,380.
On the upside, if Ethereum can stabilise and turn higher, the best near-term hope is a recovery towards the 50-day moving average around 1,950. Above that sits the 200-day moving average near 2,342, though both averages are drifting lower, which tells its own story.
Gold: the falling channel is still in charge
Gold does not look good here. The decline has tracked almost perfectly into the lower boundary of a falling trend channel, which means the technical picture is behaving with uncomfortable precision.
The market has effectively hit channel support, but that does not automatically mean a lasting bounce is on the way. At best, the upside may now be capped around 4,200, and if the pattern is treated more as a descending wedge, resistance could stretch towards 4,370.
Below current levels, the first support is around 3,920, followed by the more important 3,970 zone having already been lost. With RSI still not oversold, there is room for another day or two of weakness before a proper rebound becomes likely.
There is also a darker possibility if the wider channel interpretation proves correct. In that case, the chart could imply a much deeper move towards 3,600 by the end of next month.
The warning signs were there in RSI all along, with repeated failures below the neutral 50 level. That pattern has been consistent with the decline now unfolding.
WTI crude oil: weak reaction at the 200-day line is a concern
Crude oil is also in a difficult position. The market has fallen to the 200-day moving average near 73.94, and the bounce from that level has been underwhelming.
That matters because when a major moving average fails to produce much of a response, it often suggests the market wants to go lower.
If the 200-day line breaks decisively, the next obvious target is the late February gap area near 68 dollars. Even if oil rebounds after that, 68 now looks like a natural magnet for price.
RSI is oversold, but only mildly so, which again leaves room for another leg lower before the market becomes truly stretched.
Stocks in focus
Georgina: still holding together above rising support: Georgina continues to show resilience despite taking plenty of punishment along the way. The chart is consolidating above a rising 50-day moving average, and there is even the prospect of a golden cross developing between the 50-day and 200-day lines. A short-term dip towards 4.5 pence would not be a surprise, but as long as the shares stay above 4.95 pence, the setup remains constructive. Even without an immediate breakout, the 5 pence to 8 pence range still looks achievable.
Gear4music: pushing through the 200-day moving average: Gear4music is following through nicely after a sideways consolidation above a rising 50-day moving average. The standout feature is the way the shares have moved through the 200-day moving average as though it offered little resistance. Above 279 pence, the chart points towards the top of the channel from October, which gives a target as high as 349 pence by the end of next month. Ideally, there should not be an end-of-day close back below the 200-day line, though allowing for a little flexibility down to 270 pence is reasonable. The technical backdrop is improving, especially with a solid RSI rebound from above 50.
KRM22: quiet breakout with a long-term channel target: KRM22 is not one of the market’s headline names, but the chart is quietly interesting. The shares have broken above previous resistance around 46 pence, and both the 50-day and 200-day moving averages are already rising. That means a golden cross could arrive in the coming weeks. The broader pattern spans several years and suggests a target towards 77 pence, provided the shares can hold above the 45 pence to 46 pence zone.
Liontrust: saucer formation points to more upside: Liontrust has started to emerge from a saucer-shaped base, with a breakout appearing above 321 pence. The longer the price can hold above that area, the stronger the case becomes for a move towards the major resistance zone around 386 pence. It is not a complicated setup, but it is one worth respecting if the breakout sticks.
Ondo: recovery target sits around 10 pence: Ondo has gone from market favourite to market disappointment in fairly short order, but the chart is trying to build a recovery structure. A triangle formation has already effectively done its job, and the next question is how much of the previous decline from 15 pence to 5 pence can be retraced. The most logical target on that basis is 10 pence. That upside remains valid while the shares hold above the 50-day moving average at 4.75 pence.
Pulsar Helium: channel support still looks reliable: Pulsar Helium remains within a falling trend channel that stretches back to January. The lower edge of that channel sits near 71 pence, and while that level holds, the chart still allows for a move to the top of the range and the upper channel boundary near 95 pence by the end of next month. The ideal confirmation would be a more convincing rebound above the rising 200-day moving average, which would strengthen the continuation case. For the more cautious, the cleaner signal would be RSI reclaiming 50 from the current mid-40s area. For now, the channel itself still looks usable, and there is no urgent sign that the floor around 70 pence needs to be retested immediately.
River Global: classic step formation setup: River Global is one of the more obscure names on the list, but the chart has a familiar and attractive shape. It is forming a step pattern, with price consolidating above post-May resistance at 5.5 pence and doing so above a rising 50-day moving average. That combination can often lead to a strong breakout, and in this case the upside target is as high as 10 pence, potentially by the end of next month. Liquidity may be limited, so that always needs to be kept in mind, but technically the pattern is there.
Segro: bid news confirms prior strength: Segro has surged on bid news, but what stands out technically is that the price action was already improving before the announcement. The previous session delivered a very strong candle, opening near the low and closing near the high. That kind of move often suggests informed buying or at the very least an unusually confident market. From a chart perspective, the shares had been consolidating in a sideways shuffle above a rising 50-day moving average without needing to touch it. That is often a constructive setup in its own right, and in this case the news simply accelerated the move.
Thalia Therapeutics: sharp reaction, but resistance still matters: Thalia Therapeutics has jumped on major news, though the chart still needs to clear resistance around 0.68 pence to strengthen the breakout case. The initial target had been 0.73 pence, but after the latest move the more bullish scenario is a return to the old highs above 0.9 pence, possibly by the end of next month. That is an aggressive target, but the chart is capable of supporting it while the shares remain above the 50-day moving average near 0.6 pence.
Upland: waiting for a proper close through 3.2 pence: Upland continues to attract speculative interest, though the chart is still waiting for proper confirmation. There have been one or two false breaks around the descending resistance line in recent months, so the key now is an end-of-day close through 3.2 pence. If that finally arrives before the end of this month, the chart points towards the top of the September channel at around 4.2 pence by the end of next month. In that scenario, 4 pence plus would be a reasonable expectation.
Zenith: bounce from the 200-day line keeps the channel intact: Zenith has been quiet, and the share price has reflected that, but there is still a constructive technical angle. The shares have bounced from the 200-day moving average around 4.5 pence. While that support holds, the target becomes the top of the rising trend channel at 7.55 pence by the end of next month. For a more cautious approach, the better confirmation would be an end-of-day close above resistance at 5.3 pence, along with RSI moving back above the neutral 50 level, something the stock has struggled to do properly since April.
What matters most right now
The biggest takeaway across the board is that RSI and moving averages are doing a lot of the heavy lifting. Where markets are rebounding from around RSI 50 and holding above rising moving averages, the setups remain constructive. Where RSI keeps failing below 50 and support levels are being tested without much reaction, the risk remains lower.
At the index level:
- FTSE 100 looks steadier and has room to challenge higher resistance.
- DAX needs to reclaim 25,000 or risk a slide towards 24,500 and possibly 24,200.
- Dow remains one of the healthier charts while above 51,500.
In the risk assets and commodities space:
- Bitcoin and Ethereum still look vulnerable.
- Gold remains trapped in a falling structure with no convincing sign of exhaustion yet.
- WTI crude oil looks drawn towards 68 dollars unless buyers suddenly show more conviction.
And among the stocks, the more interesting technical setups are those consolidating above rising moving averages or breaking through long-standing resistance with improving RSI. In this batch, that makes names like Gear4music, KRM22, River Global and possibly Zenith worth keeping on the radar, while Georgina, Ondo and Pulsar Helium all have defined support levels that should tell the story soon enough.
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.
