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, Artemis, Ceres, Ecora, 80 Mile, Golden Prospect, Hemogenyx, Insig AI, Kefi, Mila, and Valereum.
Several indices are pushing through resistance sooner than I expected, and a number of smaller UK stocks are showing strong technical setups after fresh news or solid RNS. Below, I run through the main index action, cryptocurrencies, gold and a round-up of the individual stock ideas I am watching with key levels
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major indices
FTSE 100
- The FTSE has exceeded expectations in terms of timeframe and possibly magnitude, trading through the 9,750 area.
- Short term structure: we were looking for a move above roughly 9,680 and then up to the red resistance projection from May around 9,830. That target may now be hit much earlier than expected – perhaps as soon as this week.
- Upside thinking: with momentum accelerating, an upgrade to the upside target makes sense. Think about 10,000 by Christmas if this pace continues.
- On the downside: while we remain above the top of the channel near 9,670 and ideally above 9,700, the old early-October high at 9,577 is the next support area to watch.
DAX
- The DAX has been range bound and relatively dead recently between the 50-day line near 24,000 and the top of the recent range around 24,400.
- Keep an eye on an end-of-day close outside that band. A decisive close higher could open a run towards 26,000 by the end of next month.
- Worst case is the 50-day line or the channel floor around 23,600 if it fails to break higher quickly.
Dow
- The Dow is approaching the top of the May 2024 price channel near 48,400. We were looking for that by the end of next month, but October has gathered positive momentum and an upside target upgrade is likely soon.
- As long as the index holds above recent resistance around 47,200, the bias remains higher.
Cryptocurrencies
Bitcoin
- Bitcoin has formed a double top around the 116 level. We need an end-of-day close through that level to have a clear chance of running up to the top of the channel around 130 by the end of next month.
- On the downside the absolute limit from the March channel floor is about 104, with the mid-October area and the 200-day line near 109 serving as nearer-term support options.
- RSI is around neutral 50, so it is glass half full for bulls at the moment.
Ethereum
- Ethereum sits between the April uptrend line near 3,840 and the 50-day moving average near 4,223. An end-of-day close outside those parameters would be a clear signal.
- To the upside a move to about 4,640 would target the top of the falling trend channel from August.
- Downside risk sits near the floor of the channel around 3,500, but I am not expecting a breach below the April uptrend line unless something changes materially.
Gold
Gold has given back roughly 10% from the highs, which is hardly dramatic given the prior run. Price bounced off the top of an old channel – those old lines are useful because they often act as magnets for price action. The low yesterday was around 39.44 and the next resistance to watch is the recent neckline near 41.60.
Importantly we have seen an RSI 50 rebound. Regular readers know that a bounce from the 50 RSI level can be a continuation signal, so watch for a sustaining move above the neckline.
Stocks to watch
Below are the individual stock moves I am monitoring with the key levels, technical reasons and likely targets. These are short to medium term technical views based on chart structure, RSI behaviour and moving average support.
Artemis
- RNS was strong today and the shares are up about 10% after bouncing off the 50-day line near 0.38p.
- Target: retest of the best levels around 0.6p by the end of next month while the shares hold above the 50-day line.
- Missing piece so far is RSI moving back above neutral 50. That should help fuel any continuation.
Ceres Power
- Second target has been hit around £2.60, after an initial target at about £1.75. The gap higher on 15 October was significant.
- Above £2.60 the best-case technical target is around £4. The chart shows strong U-shaped, hook-shaped turnarounds similar to a cup-and-handle style continuation.
Ecora Resources
- Positive RNS has pushed shares to the top of the rising trend channel from March, previously drawn at 96p.
- Upside target: the upper parallel of the channel around £1.16 potentially by the end of next month.
- Support is well-provided by a rising 50-day moving average and RSI has bounced above 50, confirming momentum.
80 Mile
- Shares are in a steep rising trend channel. The top of that channel is heading for about 1.2p.
- Maintain the bullish case while above the September resistance near 0.8p. The channel floor gives a bit of leeway down to about 0.7p.
Golden Prospect
- Gold pullback has dragged many miners lower but Golden Prospect remains within a rising trend channel. The floor of the channel is near 73p and that is the critical support to hold.
- Near-term expectation is at least a partial rebound into the high 80s. The top of the channel, nearer-term extended target, is around £1.15, but that looks more like an early 2026 target.
Hemogenyx
- Decent RNS lifted the shares about 7%, taking them above recent resistance around 10.35p.
- Target: about 13.28p by the end of next month, backed by RSI moving back above neutral 50 and a sharply rising 50-day average.
Insig Ai
- A contract win today has produced a bounce above the rising 50-day line. This is effectively a continuation signal following the earlier gap through the 50-day at the end of last month.
- Target: 45p. Timing could be as soon as the end of next month but might also extend towards the end of the year. Key support is the 50-day near 26.5p.
Ingenta
- Strong move and the shares are heading rapidly towards the top of the channel from last November at about 101p.
- Conditions: remain above recent resistance at 84p on an end-of-day closed basis. RSI has shown a clear RSI 50 rebound which has been a leading indicator for the upside.
Kefi
- Some readers will wonder why Kefi is not ripping higher. The shares have found support in the 1.21 to 1.30p band and have been holding above that region.
- While staying above that support band I expect a relatively quick retest of the 2p zone, which was this month’s resistance, by the end of next month.
Mila Resources
- A top performer so far. Two targets have been hit already and the next target sits at about 2.3 quarter pence. Multiple RSI 50 bounces have steered the shares higher.
- Looking for that next target by the end of next month while momentum remains intact.
Valereum
- Nice U-shaped, saucer-shaped turnaround on the chart and the shares are moving higher again.
- Target: 8p by the end of next month. Best case is 10p in line with the 200-day line. There is nothing on the chart suggesting we cannot reach 10p by the end of November if momentum continues.
Summary and plan
Overall the tone from the charts is constructive. Several large-cap indices have accelerated and need slightly revised upside targets. Cryptocurrencies are at decision points and need end-of-day confirmation to extend their moves. Gold has stabilised after a modest pullback and shows a continuation signal via RSI 50. On the UK smaller caps list, RNS-driven moves and RSI 50 rebounds are leading to credible short to medium term targets on a number of names.
“Ideally now we stay on the right side of 97.00 ahead of 98.30 plus.”
I will be watching end-of-day closes and RSI behaviour closely over the next few sessions. More updates tomorrow.
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.
