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, Contango Holdings, ENGAGE XR Holdings, Enquest, Gulf Keystone Petroleum, Petrotal Corp, Serica Energy, SysGroup, Tullow Oil, Victoria
Markets have taken a geopolitical jolt, and the charts are reacting exactly as you would expect. The ceasefire situation around Iran appears to have broken down, and that has started to ripple through the major indices, crypto, gold, crude oil, and a cluster of UK stocks, especially the oil names.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
What matters now is not the headlines on their own, but where price is sitting relative to trend channels, moving averages, support lines, and recent breakouts. In several markets, the technical levels are already doing a decent job of framing what could come next.
FTSE 100: Back inside the falling channel
The FTSE 100 has slipped back within its falling trend channel from March, which is not a particularly encouraging sign in the short term.
The key resistance level is around 10,620. On the downside, the first realistic area to watch is the 50 day moving average near 10,405. That looks like the natural destination if the current rug pull continues.
For now, the decline still looks manageable from a charting perspective. The market is under pressure, but at this stage it is not yet falling apart technically. Given how early this latest geopolitical flare-up is, that could change quickly, but the 50 day line is the obvious first test.
DAX: Bull trap gap reversal turns ugly
The DAX looks like more of a casualty here. The market has produced a bull trap gap reversal, and price is now dropping back toward the lower boundary of the March channel and the 50 day moving average.
The main support zone to monitor is:
- 24,700 at the 50 day moving average
- Just below that sits the floor of the channel
If that area holds, the market could still stabilise and reverse from there. If not, then the more defensive level becomes the 200 day moving average near 24,300.
At the moment, the best case is still that support appears near the 50 day line.
Dow: Waiting for the markdown
The Dow had not fully opened into the move at the time of the analysis, so this one was still in catch-up mode. The chart suggests a drift back toward the uptrend line from last month, which comes in around 51,700.
That is the support level worth focusing on if weakness develops further.
On the upside, the broader bullish setup had been pointing toward a return to the projected record high area near 54,000, based on the November resistance projection. That move may still happen, but if the ceasefire breakdown becomes a bigger macro event, the timing likely gets pushed back beyond this month.
Bitcoin: Recovery attempt has fizzled out
Bitcoin had looked as though it might be setting up for a proper recovery after breaking a strong trend line from May. The key breakout area was around 61,000, and the better case scenario was for a push toward 65,000 or even 67,000, where last month’s resistance sits.
That upside setup has weakened badly.
Price has now fallen back below 61,000, and the chart is starting to point toward the support line projection from March, which comes in around 57,000, potentially by the end of the month.
The momentum picture has deteriorated as well. The RSI is now well below the neutral 50 level, which is not what you want to see if you are looking for a sustained recovery.
Ethereum: A cleaner failure than Bitcoin
Ethereum looks even weaker. It nudged the resistance line from May, failed there almost immediately, and then also failed at the 50 day moving average around 1,767.
That leaves the market exposed to a move toward logical support near 1,560, which lines up with turn-of-the-month support.
The one small positive is momentum. The RSI is still just above 50 at 51, so unlike Bitcoin, Ethereum has not completely lost its neutral-to-positive footing. That is not a bullish signal on its own, but it is at least a marginal saving grace.
Gold: Falling when it should be rising
Gold’s move is the odd one. With a deteriorating situation in Iran, you might expect gold to catch a bid. Instead, it is down around 1%, which looks irrational on the face of it.
Technically, though, the chart is following through on a bearish signal already spotted earlier. Gold has slipped below the RSI 50 level, and that failure has now translated into price weakness.
The next chart level to watch is the support line projection from the end of January near 3,920. That also ties in with the main post-October support zone for the market.
So even if the fundamental backdrop seems supportive, the technical picture has turned softer.
Crude oil: The chart setup delivered fast
Crude oil is where the action really is.
The prior setup was straightforward enough. Above the 67.83 gap floor, the market looked capable of heading up to the 200 day moving average, which at the time sat around 74.10. That target has now been hit very quickly, even faster than expected.
Two chart signals were especially important:
- Buying the gap floor at 67.83
- Spotting bullish RSI divergence before the turn higher
That divergence was a useful tell. It has been a recurring feature in this market both on rallies and on pullbacks, and it flagged that the downside momentum was drying up before the move back toward the 200 day line.
The current structure is now as follows:
- 200 day moving average at 74.25
- If price closes above that on an end-of-day basis, the next target is a gap fill toward 83 dollars
- That move could happen within the next week or two, possibly even sooner if momentum stays this strong
- Only a move back below recent broken resistance around 72 dollars would really delay the upside scenario
From a pure charting point of view, crude has behaved very well. The levels were clear, the divergence was there, and the market followed through.
UK stocks: Setups worth watching
- Contango Holdings: Contango is interesting because the market reaction and the fundraising optics are not quite lining up cleanly. The fundraising was at 1.1p for £5 million, while the share price was trading around 0.47p. There is also bullish divergence on the RSI, which suggests the shares could rebound toward the 50 day moving average at 0.65p, even if the fundraising overhang remains a factor.
- ENGAGE XR Holdings: This still looks like a sideways consolidation ahead of a move higher. The important detail is that the 50 day moving average is rising, and price is consolidating above it. That combination often produces the biggest upside moves when the breakout finally comes. While the shares hold above the 50 day line near 0.21p, the target remains 0.40p by the end of the month.
- EnQuest: Oil stocks have suddenly become much more attractive, and EnQuest is one of the better-looking charts. The shares had already started breaking through the resistance line around 22p before the latest burst in oil. That breakout now opens the door to a retest of the best levels seen this year around 27p. Potentially a move toward the top of the channel as high as 30p by the end of next month, possibly sooner
- Gulf Keystone Petroleum : Another oil name that may benefit is Gulf Keystone. The chart shows bullish divergence after the recent drop below 170p. If the shares can break above the resistance line from March at 175p, the next target becomes the 200 day moving average at 187p, with that move achievable by the end of next month or earlier.
- Petrotal Corp: Petra is rebounding from the floor of a rising trend channel around 23p. That kind of price channel bounce often gives a decent technical target, and here that target is the 50 day moving average at 29p by the end of the month.
- Serica Energy: Serica has also bounced from the floor of its channel. The shares gapped down, but then managed an end-of-day close back above the 200 day moving average, which is constructive. With the shares around 224p, the initial objective is a move to fill the gap toward 233p. The better case by the end of this month, or more cautiously by the end of next month, is a rise toward the 50 day moving average at 256p.
- SysGroup: This is not one that gets much attention, but the chart has promise. The shares appear to be building a broadening triangle base, and after the recent gap higher above 20p, there is scope for a bigger move. Both the 50 day and 200 day moving averages are rising, and the shares have bounced from above a rising 50 day line. That points to a target around 27p by the end of the month.
- Tullow Oil: Tullow is another oil stock with a clean rebound setup. The shares have bounced from the floor of a price channel near 11p, and while they stay above the 200 day moving average around 10.66p, the chart points toward 18p to 19p by the end of the month.
- Victoria: Victoria has already hit the target around 66p, and in fact did so twice. That repeated success at the target level strengthens the chart rather than weakens it, especially now that the shares are above recent resistance at 67p, which also marks post-October resistance. The setup is based on a saucer reversal, and if that pattern continues to play out, the upper parallel of the rising trend channel points as high as £1 by the end of next month. That is certainly a punchy call, but this is also a punchy chart.
What stands out right now
There are three broad themes on the board at the moment:
- Major indices are wobbling as geopolitical risk feeds into near-term selling pressure
- Crypto has lost momentum, with Bitcoin and Ethereum both failing at key levels
- Crude oil and oil-linked equities are the clear technical winners for now
The market is still in the early stages of reacting to the latest developments, so these levels matter. If support holds where it should, some of the damage in equities and risk assets may prove temporary. If not, there is room for further markdown.
For the moment, crude remains the strongest technical story on the board, and the oil stocks are the obvious follow-on trade where the charts are set up properly.
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.
