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, SpaceX, Andrada, Brave Bison, Delta Gold, Eco Buildings Iofina, Prospex, Rift, TPXimpact.
The broad picture remains constructive across the major equity indices, cryptocurrencies and gold. There are a few markets consolidating after strong moves, and crude oil remains the obvious laggard, but the prevailing technical message is still one of buying sensible dips rather than getting too clever on the short side.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
FTSE 100: Still Tracking the March Rising Channel
The FTSE 100 remains within the rising trend channel that began in March. The market has moved back above initial August support at 10,820, which is the key near-term improvement.
As long as the index remains above that area, the immediate focus is on the top of the channel, currently pointing towards 11,100 by the end of next month.
On the downside, the floor of the channel comes in around 10,720, with the 50-day moving average just below that at roughly 10,675. A pullback into that zone would be the more attractive buying opportunity, particularly given how reliably the 50-day line has acted as support since late June.
For now, though, support has been appearing well above the 50-day average during the second half of August. That is encouraging. The working assumption is that the channel floor should be enough to support the market if there is a dip.
DAX: Bull Mode After the RSI Recovery
The DAX is rehabilitating itself after its bounce from former July resistance around 25,900. That old resistance area has become the platform for the latest recovery.
Above 25,900, the initial upside objective is the top of the March channel near 26,600. The more ambitious target is the January resistance line projection at 27,400 by the end of next month.
It would be surprising to see the market materially below 26,000 now. If there is a more pronounced retracement, the preferred support destination is around 25,500, where the 50-day moving average and late-July resistance converge.
The RSI has already bounced above the neutral 50 level, putting the DAX back into a decent bullish technical position. That gives the upside case a proper backbone rather than leaving it as just another hopeful rebound.
Dow: A Breakout That Needs to Hold
The Dow has pushed through its August resistance line around 53,300, although the move has lost a little momentum after the initial break. That is not ideal, but it is not a disaster either.
The main requirement is simple: hold above the broken resistance line and begin making fresh highs. If that happens, the top of the rising channel points towards 54,400 by the end of next month.
There is no need to overcomplicate this one. The market has broken resistance. The bullish case remains valid while that level holds as support.
Bitcoin: Consolidating Within a Bull Flag
Bitcoin has paused after its surge higher, and the session has been a little underwhelming so far. But the bigger pattern still looks constructive. The price action resembles a mid-move consolidation bull flag, which is exactly the sort of pause that can occur before another leg higher.
Recent support sits around $75,000. While Bitcoin stays above that level, the first upside area is old May resistance around $82,000 to $83,000. Beyond that, the top of the triangle formation from February points to around $93,000, potentially by the end of September.
The 50-day and 200-day moving averages are both rising. That is the important background condition. Any pullback towards $75,000 should therefore find buyers willing to take up the slack.
Ethereum: Bull Flag, Triangle and a Potential Golden Cross
Ethereum is also consolidating after a strong move higher. The pattern can be read as a bull flag or a triangle, but either way the support level to respect is around $2,350.
Above that level, the top of the channel offers an initial target around $2,880 by the end of next month. A more cautious approach would be to wait for an end-of-day close through recent resistance at $2,550, then look towards the $2,900 area over the following weeks.
Ethereum is approaching a golden cross, where the 50-day moving average rises through the 200-day average. This is often regarded as one of the stronger stages of a bullish cycle. It does not guarantee a straight-line move higher, but it fits well with the positive channel and consolidation structure already on the chart.
Gold: Strong Range Consolidation With Higher Targets in Sight
Gold remains strong and continues to consolidate within a range between 4,600 and 4,700. The straightforward trigger is an end-of-day close above 4,700.
That would put April resistance near 4,900 into play. The upper channel projection is more dramatic, pointing towards 5,100 to 5,200 by the end of October, but there is no need to race too far ahead. The 4,800 and 4,900 zones are the more sensible levels to focus on first.
Ideally, gold remains above the rising 200-day moving average at 4,522, with the 50-day line rising alongside it. Like Ethereum, gold is heading into a golden cross setup, which supports the wider bullish interpretation.
WTI Crude Oil: The Weak Link Among the Major Markets
Crude oil is currently the weakest of the major markets. The gap fill and subsequent sell-off around $87 to $88 was disappointing, although not entirely surprising given the falling trend channel in place.
The preferred support zone is the 50-day moving average at approximately $78.50. Even on an intraday basis, that is the area where the market should ideally find support.
There is initial August support just below $75, but the hope is that oil will not need to test it. Until the falling channel is properly overcome, the market remains less attractive than the indices, crypto and precious metals.
SpaceX: A Tight Consolidation Between Support and the 50-Day Line
SpaceX is still consolidating between recent support at 130 and its 50-day moving average around 148.4. Four sessions have now passed without the price reaching that moving average, so a test of it in the coming days would make sense.
The top of the descending price channel is near 145, and that remains the immediate upside target. On the downside, a break below 130 would increase the risk of a move towards 121, where the floor of the July falling channel sits.
For the moment, it is a range trade. A break above the moving average would improve the outlook, while a loss of 130 would make the downside case more pressing.
UK Small-Cap Charts to Watch
- Andrada Mining: Bull Flag Breakout Still Has Room: Andrada is enjoying a bit of a victory run. The bull flag breakout through 5p has worked well, and support is now appearing around 5.5p. The shares have reached the 6p target. Above 6p, the upper parallel of the rising formation points towards 8p by the end of next month, possibly sooner if momentum remains as firm as it has been.
- Brave Bison: Fundamentals Improving, Chart Needs to Catch Up: Brave Bison delivered a very decent update, even if the share price has not yet reflected the improving fundamentals with quite the same enthusiasm. The shares gapped up and remain in a broad range between 80p and £1. The target is £1 by the end of next month. Dips towards the rising 200-day moving average at 80p should be regarded as buying opportunities while the wider recovery remains intact. It is often worth paying attention to stocks that have been excessively picked on by the bears, especially where there is no obvious fundamental reason for the negativity to continue. The market can take its time to catch on, but the technical base is there.
- Delta Gold: Breaking Resistance With Momentum Behind It: Delta Gold has broken above recent resistance around 126p. That opens the way towards the final major resistance level on the way down at 155p, with that target possible by the end of next month. The chart is developing within a rising trend channel, although the more immediate picture is a broad range between around £1 and £2. The latest breakout is supported by an RSI move through the neutral 50 level. There have also been several encouraging sessions recently where the shares opened near the low and closed near the high. That is the sort of underlying accumulation behaviour one wants to see during a recovery.
- Eco Buildings: Strong Candles Above the 50-Day Moving Average: Eco Buildings has broken above its 50-day moving average, currently around 10p. That technical improvement puts the 200-day line at 13.4p in play as the minimum upside target. The stronger scenario is a move towards 17p, where the top of the rising trend channel and the May resistance projection converge. That is a target for the end of next month. The setup looks particularly encouraging because of the strong candles, with opens near the lows and closes near the highs, alongside the breakout through recent resistance at 11.3p.
- Iofina: Rising Channel Points Towards 73p: Iofina has not yet received the market attention its recent strong update might have deserved. From a chart perspective, it is sitting in a rising trend channel based around 48p. Above that support, the top of the channel from last November points towards 73p, potentially by the end of October. More cautious traders may prefer to wait for an end-of-day close above the 50-day moving average at 54p before becoming more committed. The rising 200-day line gives the chart a solid backbone. In that context, any weakness below the 50-day line could end up being a buying opportunity rather than a reason to panic.
- Prospex Energy: Rehabilitation After a Recovery From 2.9p: Prospex is beginning to rehabilitate itself. The shares have staged a decent recovery this month from 2.9p, and the first target is 3.9p, followed by the top of the range and channel around 4.4p over the next week or two. The best-case outcome is a move to the wider channel near 5.25p by the end of next month. That may sound ambitious, but it becomes realistic if this is indeed the larger breakout that has been building. The shares are moving above a rising 50-day moving average, a combination that can often produce substantial moves. Ideally, Prospex now stays above recent intraday support at 3.4p.
- Rift: Double RSI Rebound Adds to the Bullish Setup: Rift is another interesting chart. The shares have bounced above the 50-day moving average, which is beginning to turn higher. That should coincide with a more meaningful move to the upside if the setup follows through. The initial target is 8.5p, with the 200-day moving average at 9p or higher as the objective by the end of next month. The bullish case remains intact while Rift stays above the 50-day line at 7.1p. The particularly positive feature is the double RSI rebound above 50, first in the middle of the month and then again recently. That kind of momentum action can be an early signal that the price is preparing to move higher.
- TPXimpact: Contract Wins and a Chart Ready to Motor: TPXimpact had a stonking RNS, including contract wins connected with the Land Registry and the British Library. It may not sound glamorous, but it is meaningful business and the market has responded well. The chart sits within a rising trend channel, with the top of that channel pointing towards 97p by the end of next month, perhaps sooner. The shares need to stay above the 50-day moving average at 71p, while recently broken resistance at 77p looks like the obvious level to buy on dips. TPXimpact also has a double RSI rebound above 50, adding another bullish momentum signal to the mix. This looks like a chart that is ready to motor if it can maintain support above the breakout area.
The Overall Technical Picture
The strongest markets are those maintaining rising moving averages, holding above recent support and showing positive RSI behaviour. The FTSE, DAX, Bitcoin, Ethereum and gold all fit that description, while several UK small caps are producing breakout patterns worth monitoring.
Crude oil is the exception and remains the more cautious chart until it can stabilise around its 50-day average. Elsewhere, the bias remains towards buying dips at clearly defined support levels rather than chasing prices after a sharp move.
Technical analysis is about managing levels, not making guarantees. A bullish target only remains valid while the support and trend conditions that underpin it continue to hold. When those levels fail, the chart needs to be reassessed without sentiment getting in the way.
This material is for market commentary and technical-analysis discussion only. It is not personal investment advice, and all investing involves risk.
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.
