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, Coinsilium, Directa Plus, GenIP, Genincode, Helium Ventures, Haydale, Kendrick, Strip Tinning, Smarter Web, United Oil & Gas, Wishbone
Global Market Overview: FTSE 100, DAX, and Dow Jones
FTSE 100: Holding Ground Amid Geopolitical Tensions
The FTSE 100 has shown remarkable resilience given the current geopolitical uncertainties. Despite some headwinds, the index is holding above the critical 8,800 level, which has shifted from being a resistance point to solid support. This is a positive sign, suggesting that the market may continue its upward trajectory within the rising trend channel established since early last year.
Although the FTSE missed the March peak of 8,908 by a few points this week, the outlook remains optimistic. Should the index maintain above 8,800, it could push towards the upper boundary of the channel near 9,020 by the end of next month. On the downside, a fall below 8,700 would be concerning, but the 50-day and 200-day moving averages are both rising in parallel, reinforcing the market’s underlying strength.
DAX: Navigating Gaps and Support Zones
The DAX has presented a somewhat unusual pattern recently, with two gap-down sessions that initially suggested weakness. However, the market managed to recover on Friday, finding support above the mid-May zone around 23,200. This support level is crucial for the DAX to maintain its momentum.
As long as the DAX stays above this zone, there is potential for the index to climb back to the top of its range, around 24,300, and possibly test the upper channel boundary near 24,700. On the flip side, if the market falters, a test of the 50-day moving average near 22,800 could be necessary to stabilize the price.
Dow Jones: Consolidation Near Key Support
The Dow Jones continues to consolidate near the floor of its rising trend channel, roughly around 42,000. This consolidation has been somewhat frustrating as the index has struggled to break through the neckline resistance at 42,800, which was an old resistance level from March.
Breaking above this resistance would open the door to a target of 44,000 by the end of next month. However, given the current environment, a test of the 50-day moving average near 41,100 remains a plausible downside scenario. This level will be critical to watch, as a bounce here could signal renewed strength, while a break below might indicate further weakness to come.
Cryptocurrency and Precious Metals: Bitcoin and Gold Outlook
Bitcoin: Testing New Support Levels
Bitcoin has attracted strong buying interest recently, particularly from institutional players such as Bitcoin Treasury funds. This has led to two successful bounces off the rising 50-day moving average this month, a positive technical sign that support is forming.
Despite these bounces, Bitcoin is not entirely out of the woods yet. Maintaining a close above the 50-day line, which currently sits near 100,000, is critical for the cryptocurrency’s next leg up. Should Bitcoin manage to close above 106,000 to 107,000 on a daily basis, it could retest previous highs around 112,000 and potentially push towards 124,000 by the end of next month.
Gold: A Steady Climb Amid Uncertainty
Gold remains a beacon in uncertain times, though it’s not quite as “on fire” as some might expect given the current geopolitical tensions. The metal has encountered resistance around the 3,400 level, failing to break through decisively at the end of last week.
If gold can close above 3,400 on a daily basis, there is room for it to rally towards 3,800 by the end of next month. On the downside, the 50-day moving average near 3,279 offers a solid floor, supporting the precious metal’s price in the near term. The ongoing conflict and war situation globally will remain a key driver influencing gold’s trajectory.
Stock Market Highlights: Key Picks and Technical Setups
Coinsilium: Eyes on Major Breakout Levels
Coinsilium continues to draw attention, especially from the Bitcoin Treasury crowd. The stock is hovering close to a critical resistance level at 12 pence, which was the previous peak in 2021. Clearing this hurdle could open the path to a significant upside target of 30 pence or more, making it a compelling watch for momentum traders.
Support is expected around 10 pence, a level that acted as resistance last month. Holding above this support zone will be crucial for Coinsilium to maintain its bullish momentum and aim for the higher target.
Directa Plus: Potential Trend Reversal in Play
Directa Plus recently experienced a sideways shuffle just above a rising 50-day moving average, a bullish technical setup that often precedes upward price moves. Following an interview earlier this week, the stock has seen a decent reaction, suggesting growing investor interest.
If Directa Plus can break above the post-April resistance at 7 to 12 pence, the next target would be around 12 pence by the end of next month or even sooner. This would mark a significant trend change for the company, signaling a potential turnaround after a period of consolidation.
GenIP: Approaching Key Resistance
GenIP has shown promising signs after a recent presentation that appeared well received. The stock is nearing a resistance line dating back to December, currently around 32 pence. A break above this level could propel the shares towards 45 pence next month.
Additionally, the 50-day moving average is already rising, and the 200-day line is expected to catch up in the coming sessions, which would further support the bullish case for GenIP.
Genincode: Consolidation and Gap Fill
Genincode is another stock showing early signs of recovery. It has consolidated above the 50-day moving average and filled a gap from April around 2.44 pence. A daily close above this level could trigger a move towards the top of a falling trend channel, potentially reaching 6 pence by the end of next month.
The key support level to watch is the 50-day moving average at 1.99 pence. Staying above this line will be essential for maintaining upward momentum and possibly replicating the spike seen in January.
Helium Ventures: Bear Trap Rebound Sparks Rally
Helium Ventures surprised many with a strong rebound on Friday, following a bear trap that saw the shares dip below 3.5 pence before rallying sharply. This move has placed the stock within a broadening triangle pattern, with upside potential towards 9 pence over the next couple of weeks.
Holding above the old resistance at 5 pence is critical for this bullish scenario. Given the exciting developments in Helium’s sector, this stock remains one to watch closely.
Haydale Graphene: Surpassing Targets
Haydale Graphene has been on a roll, surpassing all previous targets including the 4 pence mark, which might serve as a near-term peak. The immediate focus is on holding the 3 pence support area and possibly retesting the 4.5 pence peak one more time.
Interestingly, there appears to be a thematic link between Haydale and Directa Plus, as both operate in the graphene space, which is gaining increased attention among investors.
Kendrick: Emerging Turnaround
Kendrick is showing the first signs of a turnaround after a period of sideways movement. The stock is trading above a rising 50-day moving average and recent broken resistance at 23 pence, pointing towards a potential move to 47 pence by the end of next month.
This technical setup suggests growing investor confidence and a possible end to the prior downtrend.
Strip Tinning: A Surprising Chart Signal
Strip Tinning caught attention with a gap up off the lows, a strong technical signal that often precedes further gains. The 50-day moving average is rising, and the stock is targeting at least 29 to 30 pence, with a best-case scenario pushing towards 42 pence by the end of next month.
While the fundamental drivers behind this rally are unclear, the technical picture is compelling enough to merit close monitoring.
Smarter Web: Stock of the Year Contender
Smarter Web has been the standout performer recently, climbing from 15 pence last month to new highs within a well-defined trend channel. The stock remains on track for a target of 220 pence.
The company recently raised capital after the market close on Friday, which might cause some short-term volatility, but as long as the price stays above 155 pence, the long-term outlook remains very bullish.
United Oil & Gas (UOG): Strong Legs in Recovery
Unlike many stocks that have seen brief rallies, UOG has demonstrated sustained strength with powerful price action and strong candlestick formations. The stock is poised to reach 30 pence over the next week while maintaining support above the broken resistance at 22 pence.
One key technical event to watch is the potential golden cross, where the 50-day moving average crosses above the 200-day line. This crossover is often associated with the strongest part of a bullish cycle and could further fuel UOG’s momentum.
Wishbone: Bottoming Out and Ready to Rise
Finally, Wishbone appears to be at the bottom of its trading range with a rising 50-day moving average around 0.15 pence. Holding above this level could set the stage for a retest of resistance near 26 pence by the end of next month.
The relative strength index (RSI) at 57 supports the case for a potential turnaround, signaling that the stock is gaining strength without being overbought.
Conclusion: Navigating Opportunities and Risks
As we move deeper into June, the markets are presenting a mixed but generally positive technical picture. Key indices like the FTSE 100, DAX, and Dow Jones are holding important support levels, while Bitcoin and gold continue to offer interesting opportunities amid global uncertainty.
On the stock front, a number of smaller companies are showing promising signs of recovery or breakout potential. From Coinsilium’s push towards new highs to Helium Ventures’ dramatic bear trap rebound, these stocks highlight the dynamic nature of the market right now.
Investors should keep a close eye on critical support and resistance levels, moving averages, and volume patterns to gauge the sustainability of these trends. As always, maintaining discipline and managing risk will be essential to capitalize on the opportunities that lie ahead.
Stay tuned for more updates and insights as the market continues to evolve.
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.
