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, Arkle, Bezant, Cloudbreak, EnergyPathways, EKF, Fusion Antibodies, HydrogenOne, Hamak, Narf, Nativo.
Market Indices Overview
FTSE 100
The FTSE 100 remains resilient, maintaining its position near the top of the 2024 rising trend channel. The key support level to watch is around 9,050, which forms the floor of this channel. On the upside, traders should look for an acceleration toward the resistance line near 9,270, the top of the red rising trend channel established in May. This target is expected by the end of August. On the downside, holding above 9,000 is crucial, with the May channel floor at approximately 9,020 acting as a critical support zone.
DAX
The DAX continues to bounce off its rising 50-day moving average, currently around 23,900, maintaining a positive momentum throughout July. The RSI indicator supports this bullish bias with bounces near the neutral 50 level. However, a line of resistance sits at 24,400. Traders looking for more decisive action should await a break above this level to target the upper channel boundary from last year around 25,300 by the end of August. On the downside, the March resistance line at 23,500 could act as a floor to limit losses.
Dow Jones Industrial Average
The Dow has faced repeated resistance at the 45,000 mark, unable to break through decisively. After breaking a resistance line earlier in July, the index now appears poised to test support around 44,300. The best strategy here is to wait for a clear end-of-day close above 45,000 or to look for dips toward recent support near 43,800. The RSI remains comfortably above the neutral 50 level at 58, hinting at a potential upward move once the 50-day moving average realigns with price action.
Cryptocurrency Highlights
Bitcoin
Bitcoin is currently navigating the floor of a steep red rising channel, making pinpointing exact support levels challenging. Key support lies near $115,000, just above the old May resistance at $112,000. A decisive end-of-day close above $121,000 could trigger a significant rally, potentially reaching $242,000 by the end of August—if this breakout happens within the next week or so. The RSI at 58 indicates Bitcoin is well-positioned for an upward move, suggesting a consolidation phase preparing for a breakout.
Ethereum
Ethereum is trading within a defined range, having briefly tested the upper resistance zone around $3,870 before pulling back. Support is strong near $3,530, aligning with the top of the old March trend channel. Staying above this level keeps hopes alive for a move toward $4,400, the upper boundary of a rising trend channel in place since February. An aggressive signal for traders would be an end-of-day close above $3,850, which could pave the way for a push beyond $4,000.
Gold Market Analysis
Gold has struggled recently, oscillating within a steep rising trend channel. Support is expected near the $1,330 to $1,320 zone, though this remains somewhat fluid. A break below this floor could see prices testing the $1,220 to $1,320 range. Despite this, the 50-day moving average is rising, and the RSI is currently below 50, suggesting caution. Should gold break above the April resistance line near $1,430, a rally toward $1,800 by the end of August remains possible.
Stock Spotlight
Arkle Resources
Arkle shares have shown recent gains and currently trade within a rising trend channel. Holding above the 0.20 pence level is key, with a potential target near 0.62 pence by September. While this target seems distant, staying above the support zone keeps the bullish scenario intact.
Bezant Resources
Bezant has maintained its upward momentum from last month, finding support around the October resistance level at 0.039 to 0.04 pence. The RSI is bouncing off the neutral 50 mark, reinforcing positive sentiment. A retest of 0.55 pence by the end of August is a reasonable target if the trend persists.
Cloudbreak Discovery
Following today’s RNS, Cloudbreak appears to be forming a rising trend channel base. The shares are currently bouncing off a falling 200-day moving average. Traders should watch for an end-of-day close above the 50-day moving average to target 0.28 pence by the end of August.
EnergyPathways
EnergyPathways is positioned interestingly at and above the 50-day moving average of 4.85 pence. The RSI has bounced multiple times above the neutral 50 level, signaling strength. The next resistance lies at the 200-day moving average around 6.75 pence, with a longer-term challenge at 8 pence, which has persisted since February. Staying above the October channel floor at 4 pence is critical for continued upside potential.
EKF Diagnostics Holdings
EKF is showing an active setup, having reached an initial target near 29.5 pence. The next target is around 35 pence by the end of August. Multiple RSI bounces above 50 this month suggest a strong momentum build, which is promising for further gains.
Fusion Antibodies
Fusion Antibodies, a highly requested stock, has rallied strongly. The key support is around 8 to 9 pence, coinciding with January resistance levels. Holding above this zone could lead to a retest of 14 pence by the end of August, supported by a rising 200-day moving average.
Hydrogenone Capital Growth
Despite a quieter trading day, HydrogenOne is forming a rising trend channel base. The shares have gapped above the 200-day moving average at 25 pence. A retest of 31 pence is possible within the next week, with a best-case scenario aiming for 37 pence by the end of August, filling a gap from November.
Hamak Gold
Hamak has been a standout performer this year, with gains up to nine times the initial value. After hitting all trendline targets, the stock is trading above last week’s peak near 5.25 pence. The top of the rising trend channel from March is around 11 pence, representing a potential upside if momentum continues.
Narf Industries
NAF Industries has recently moved above the 200-day moving average for the first time in about a year, potentially signaling a new base. The next step is to close above 0.60 pence to target the channel top at 0.87 pence. Dips toward the channel floor at 0.47 pence may offer buying opportunities, but falling below the 50 and 200-day moving average area at 0.50 pence should be avoided for bullish continuity.
Nativo Resources
Nativo has experienced several volatile phases, but current signals are encouraging. The stock shows bullish divergence with lower lows in price but higher RSI readings—a classic leading indicator. Breaking resistance at 0.32 pence could open a path to 0.82 pence by September. Alternatively, a more cautious target is the 50-day moving average around 0.38 pence. Overall, a move above 0.30 pence would be a positive trigger.
Conclusion
July has presented a mixed but promising landscape across indices, cryptocurrencies, and select stocks. Key technical levels such as support floors, resistance lines, and moving averages continue to guide potential entry and exit points. The RSI readings across markets mostly suggest consolidation phases poised for breakout moves. For traders and investors, patience and close monitoring of these critical zones will be essential in navigating the upcoming weeks.
Stay tuned for more updates and deeper dives into these trends as August unfolds.
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.
