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, ASOS, Ajax, Delta Gold, EDX, eEnergy, Empyrean, Goldstone, Impax, Jubilee, Kazera, Ocado, Thungela, Vodafone.
The bigger picture across the main markets is fairly straightforward right now. Equity indices are still trying to grind higher, crypto is attempting a recovery, and commodities are sending a rather mixed, and at times completely counterintuitive, signal. On the stock side, a handful of setups are beginning to improve, especially when price is reclaiming key moving averages or showing bullish divergence after prolonged weakness.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100 outlook
The FTSE 100 has managed a respectable bounce from the still rising 50 day moving average. That is constructive in itself, and the fact that the rebound also came from RSI 50 adds another positive layer.
The near term objective is a move towards the top of the falling red trend channel that was broken earlier in the week. That points to 10,620 over the coming days.
If the market slips back, the key point is that the downside should remain contained. The area around 10,350 matters because it ties in with the uptrend line running from March. That is the main support zone to keep in mind.
DAX outlook
The DAX is still one of the steadier continental setups. The market has respected the floor of the rising trend channel that has been in place since March, and it is still trading above the 50 day moving average near 24,800.
As long as that trend channel support and the 50 day line remain intact, the path of least resistance is still towards a retest of the recent highs.
- Initial upside level: 25,400, which fills the top of the previous gap down
- Higher target: 25,900, which would effectively revisit the recent peak area
Dow Jones outlook
The Dow is still trying to find its footing, but in many respects it is doing a better job than the other major indices covered here. There is an uptrend line in place from early last month, and that comes in around 52,000.
While the index holds above that level, the expectation remains for a retest of recent resistance and then the resistance line from April.
- Support: 52,000
- Resistance target: 53,200
- Best case by month end: 54,000, based on the November resistance projection
What is striking here is how little the market appears to care about the renewed Iran story. The Dow is largely trading its own setup rather than reacting dramatically to headlines.
Bitcoin recovery setup
Bitcoin continues to build a tentative recovery. The market is edging back towards the 50 day moving average, with 65,000 already identified as a minimum upside reference point.
The RSI is in the low 50s, which is a decent place for a rebound to gather traction. That leaves the door open for at least a move towards 67,000, which matches the June peak.
Even if price struggles beyond that point, there are still some encouraging technical features in place:
- A higher low near 61,600
- RSI rebounding from a supportive zone
- Price attempting to regain the 50 day line
There is still overhead pressure from the falling 50 day and 200 day moving averages, so this is not a clean breakout story yet. But the recovery effort is real enough.
Ethereum trying to reclaim momentum
Ethereum is in a similar position, but arguably with a slightly cleaner technical shape in the very short term. Price has tested the 50 day moving average for the third time recently and is also up against the resistance line from April near 1,800.
A break above that opens the way to the more obvious resistance at 1,830 and then potentially a move towards 1,960, which had been support before the breakdown last month.
The encouraging part is the momentum profile:
- RSI has rebounded through 50
- RSI is sitting in the upper 50s, often a good area for recovery trades
- Price is pressing against the 50 day moving average around 1,767
A solid close above that moving average would improve the picture further.
Gold remains awkward
Gold has been behaving in a way that makes little sense if you are trying to map geopolitical headlines directly onto price action. War worries saw the price fall, while peace or ceasefire hopes helped it rise. That is not the clean safe haven behaviour many expect.
Technically, the market is trapped between old October support around 3,900 and the top of a falling trend channel near 4,300. For now, the RSI remains below the neutral 50 mark, which leaves the downside favoured.
That means the risk remains for another test of the sub 4,000 area unless momentum improves materially.
Crude oil still looks weak
Crude oil only managed a brief spike towards 76 dollars on the latest Iran developments, and that rally quickly faded. In effect, it almost merely corrected part of the sharp decline seen before the ceasefire.
The current technical stance is still bearish while price remains below the 200 day moving average at 74.33.
- 200 day resistance: 74.33
- Downside target: below 68 dollars
- Extra support reference: the floor of the February gap
- RSI: 38, which supports the weaker tone
At this stage, the market looks set up for more downside than upside.
Stock setups to watch
- ASOS: ASOS delivered a nasty bull trap after the push to 340p, followed by a gap fill and then a rebound. Despite the rug pull, the chart is starting to improve again. Above 340p, the setup begins to look more constructive. There has been a golden cross between the 50 day and 200 day moving averages, and the RSI has bounced from its own uptrend support. The upside target is the late 2024 resistance zone near 450p, potentially by the end of next month.
- Ajax: Ajax has been the subject of some fairly ridiculous name calling, but the chart is what matters. The price itself has not done much, yet bullish divergence has started to appear. If the shares can break 5.25p, the next target looks to be 7p, perhaps by the end of next month. Ideally, the stock quickly recovers the early June support area around 4.75p and uses that as a springboard.
- Delta Gold: Delta Gold is another name where the share price appears to be fighting off a lot of negativity. The chart, however, has improved notably this week. The stock has pushed above a rising 50 day moving average, and that often acts as a precursor to a stronger move higher. Above the broken resistance at 155p, the target becomes 240p by the end of next month. Ideally, price stays above the 50 day line around 150p and leaves the bears looking rather silly.
- Edx Medical Group: EDX may at last be starting to reflect the company’s diagnostics promise in the chart. There is a broadening triangle in play, and that implies a target in the 14.5p to 15p area by the end of next month. There is one obvious caveat here: fund raises. This is not exactly a company that can resist them. Even so, if the chart holds above the 50 day line and support around 10p, the move towards 15p remains the working scenario.
- Eenergy Group: eEnergy is beginning to hint at a U shaped turnaround, which would be bullish if it develops properly. The first important step was getting back above 2.8p last month, and that has now been achieved. As long as that area holds as support, the next target is old support from last summer around 3.75p, ideally by the end of this month.
- Empyrean: Empyrean remains a risky situation, but the chart does have one attractive feature: consolidation above a rising 50 day moving average. That setup often comes before a more significant upside move. There is support around 0.06p, and while the shares stay above both the 50 day and 200 day lines, the target is the top of the rising trend channel near 0.13p by the end of next month.
- Goldstone Resources: Goldstone is trying to bounce and arguably should be bouncing rather more decisively. Still, there are some positives. The shares are above a rising 200 day moving average, and the recent premium fund raise at 1p should logically encourage a move back towards that level. That leaves 1p as the target by the end of next month, provided the stock stays above the 200 day line around 0.66p.
- Impax Asset Management: Impax is not a chart many people seem to pay much attention to, but it has been behaving rather neatly. The last target near the top of the triangle around 116p was almost hit exactly. An end of day close above 116 should be enough to trigger a fresh upside leg, with post April resistance at 135p as the target by the end of next month. The preferred condition is simple enough: stay above 110p.
- Jubilee Metals: Jubilee has been a thoroughly bearish affair for quite some time, but there are at last some signs of life at lower levels. Bullish divergence has developed while the shares were making lower lows in July. If the stock can deliver an end of day close through 2.5p, the target becomes the top of the recent range at 3.25p, perhaps by the end of next month. The more enthusiastic case would be to aim for that by the end of this month. Support needs to hold above the recently broken low at 2.4p.
- Kazera Global: Kazera has decent news flow behind it, and the chart is reflecting that with a recovery pattern and two unfilled gaps to the upside. The target is the top of the triangle at 1.75p by the end of this month, especially while price remains above the former April resistance at 1.35p.
- Ocado Group:Ocado has bounced from the main support zone around 170p. The immediate aim is a recovery towards the 50 day moving average and the major resistance line from August near 192p by the end of this month. The support level that matters most is still 170p.
- Thungela Resources: Thungela has a quietly improving setup. The shares bounced from a modest uptrend line near 420p, and that move matters more than it might first appear. There is bullish divergence in the background, and there was also a bear trap on Thursday when the price dipped to 404p before reversing. That low offers one possible stop reference, while Friday’s support at 415p is another. If the shares can break clearly through 450p, the next objective is 500p and above, where the 200 day moving average comes into play. That move could happen by the end of next month, and arguably even by the end of this month if momentum builds.
- Vodafone: Vodafone has been an absolute dog for a very long time, but Friday’s stake related news helped the shares break above the 50 day moving average for the first time in at least a month. The initial target is 114p, which is the top of the falling trend channel from February. Above that, there is scope for 120p by the end of next month, but only if the stock can hold above the 50 day line.
What stands out across the board
A few recurring themes keep showing up across these charts:
- Moving average reclaims matter: Several markets and stocks are trying to get back above their 50 day lines, and in some cases that is the key trigger for recovery.
- RSI behaviour is important: Rebounds through 50, especially from the low or mid 40s, are helping support the bullish case in equities and crypto.
- Bear traps and bull traps are shaping sentiment: ASOS suffered from one of the uglier bull traps, while Thungela has just produced a useful bear trap reversal.
- Commodities are not following the obvious script: Gold and oil have both behaved in ways that do not neatly match the geopolitical narrative.
For now, the broad tone remains selective rather than one way. The indices are still holding together, crypto is trying to recover, and a few overlooked shares are starting to turn technically interesting. The names worth watching most closely are the ones reclaiming support and pushing above key moving averages without immediately giving the move back.
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 to 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.
