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, Corcel, East Star, Fiinu, Haydale, Metals One, Mast, Phoenix Copper, Premier African, Sunda, Shearwater, Smarter Web, Vaultz, WeCap, Wishbone.
Market Indices Outlook
FTSE 100
The FTSE 100 has recently broken through a stubborn resistance zone around 8840, setting its sights on the top of the rising trend channel established since spring last year. The target is around 9030 by the end of July, a level anticipated for several weeks now. On the downside, it is crucial to avoid an end-of-day close below 8800, which has provided recent support. The worst-case scenario points toward a decline to the 50-day moving average at 8736. However, with the Relative Strength Index (RSI) still moderate despite the strong rebound since April, there appears to be ample room for the FTSE to extend its upward momentum.
DAX
Similar to the FTSE, the DAX has been hovering around and above its 50-day moving average, signaling a potential upward push. The key objective remains the top of the rising trend channel from spring last year, approximately 25,000, expected by the end of this month. Should the market falter, a retest of the 50-day line near 23,700 is plausible. Notably, the RSI has shown two rebounds at the neutral 50 level, a leading indicator for upward moves, which has so far held true.
Dow Jones Industrial Average
The Dow recently pulled back from the 45,000 zone but remains on track for further gains. The previous resistance at 44,000 has been a critical hurdle, and surpassing it could pave the way for a rise to 47,400 by the end of August. The market is approaching a golden cross, with both the 50-day and 200-day moving averages rising—a historically strong phase for market cycles. However, a breakdown below June’s support at 43,200 could pose a risk to this bullish outlook.
Cryptocurrency and Gold Analysis
Bitcoin
Despite widespread adoption of Bitcoin treasury strategies, Bitcoin has yet to reach new record highs. The significant resistance lies around $110,000, which must be broken on an end-of-day or weekly basis to target $125,000 at the top of the rising trend channel from March last year. Ideally, this breakout could occur by the end of July, or at worst by the end of August. The RSI currently sits at 55, signaling a strong position for an upward move following a recent rebound at the 50 RSI mark.
Gold
Gold is facing challenges in maintaining its rising trend channel since March. Resistance around 3370 is proving difficult to overcome, with the price retesting the June 30th floor near 3223. The RSI has dipped well below neutral 50, marking the first sustained negative momentum in some time, suggesting caution for gold investors.
Stock Spotlight: Key Picks and Potential Breakouts
Corcel
Corcel has shown resilience with a ricochet off its rising 50-day moving average and a rise above the RSI 50 level. The shares are targeting the 0.45 pence area, maintaining bullish momentum as long as they stay above the 50-day line.
East Star
East Star looks well-positioned for a breakout, currently testing neckline resistance at 1.65 pence. A successful breakout here could lead to targets of 1.75 pence initially, and possibly 2.6 pence by the end of July, riding the upper parallel of the rising trend channel. The upside remains valid while the price holds above the 1.37 pence 50-day line.
Fiinu
After a period of consolidation, Fiinu has broken resistance from March and established new support, forming a bullish V-shaped flag. The shares are expected to retest the 14-15 pence range by the end of July, provided they remain above 8 pence.
Haydale
Haydale is part of the graphene revival and has experienced a strong rally with multiple targets already achieved. The next level to watch is the August 2023 resistance at 1.15 pence. Maintaining above 0.80 pence is key to sustaining this bullish momentum.
Metals One
After a dip to 7 pence that likely shook out weak holders, Metals One has staged a sharp rebound, aiming for the 27 pence 50-day moving average. Beyond that, resistance is sparse until the low 40s. Staying above the late June resistance at 23 pence is critical for this mid-move consolidation breakout.
Mast
Mast continues to impress with all target lines broken, including the last target at 1.6 pence. The next ambitious target is 3.4 pence, based on a resistance projection from 2022, potentially achievable by the end of August. Current price action above the 1.6 pence level is encouraging.
Phoenix Copper
Phoenix Copper shows gradual improvement, supported by an unfilled gap to the upside and a recent bounce above its rising 50-day line. Two RSI bounces above neutral 50 reinforce the bullish case, with a target of 7.75 pence by the end of July.
Premier African
Premier African shares have surged following the departure of the previous CEO. An end-of-day close above the gap at 0.16 pence could push the shares toward the 200-day moving average at 0.30 pence, with resistance near 0.42 pence in the weeks ahead. This comeback underscores the company’s resilience post-leadership change.
Sunda
Sunda is staging a revival with a U-shaped turnaround pattern. The initial target is the 50-day moving average at 0.38 pence by the end of July. Confirmation would come from a close above the 0.30 pence gap level, making it a compelling micro-cap trade for those interested in smaller stocks.
Shearwater
Shearwater maintained strength with a retest of the triangle target at 51 pence. Surpassing this level opens the door to a resistance projection near 70 pence from summer 2023, potentially reachable by the end of August. The bull scenario remains intact unless the price falls below the recent swing low at 46 pence.
Smarter Web
Smarter Web has broken resistance at 320 pence and retested the 375 pence target precisely. An end-of-day close above 375 is needed to stay in contention for a retest of the £5 to £6 range, which was resistance just last month. Support near 305 pence should hold to maintain bullish momentum.
Vaultz
Another Bitcoin treasury play, Vaultz, is currently trading mid-range between previous targets of 13 pence and 32 pence. A close above 24 pence could trigger a move back to 32 pence, with support near 17.6 pence acting as a key level to watch.
WeCap
WeCap is showing an exciting sharp V-shaped rebound, a positive leading indicator on the upside. The initial target is 1.8 pence, with potential for 2.75 pence if favorable US-related announcements emerge by the end of August. Staying above recent support at 1.3 pence is crucial, especially as the stock approaches a golden cross phase with rising 50 and 200-day moving averages.
Wishbone
Wishbone has already hit the 0.50 pence target, a call few make openly. The next level to watch is resistance at 0.72 pence from September 2024, with expectations to reach this by the end of July. Maintaining above 0.40 pence will help sustain this upward push.
Conclusion
The market landscape as of early July is characterized by promising upward trends across key indices like the FTSE 100, DAX, and Dow, alongside a cautiously optimistic Bitcoin outlook. Select stocks continue to demonstrate strong technical setups, breakouts, and recoveries, offering multiple trading opportunities. Staying vigilant around critical support and resistance levels, especially the 50-day moving averages and RSI indicators, will be essential for navigating the weeks ahead. Keep an eye on these developments as the summer unfolds, with several targets potentially reachable by the end of July and August.
Stay tuned for more updates and market insights to help you make informed decisions in this dynamic environment.
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.
