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, Atome, Delta Gold, GSTechnologies, Hvivo, Kromek, Nativo, Nuformix, Orosur, Oriole, and Phoenix Copper.
The market ended the week with a few sour notes, and the charts are flagging the places to watch into the new year. This roundup covers the major indices, crypto, gold, and a selection of small cap and junior miners where technical patterns are hinting at potential moves. Focus on the 50 day and 200 day moving averages, RSI behaviour around the neutral 50 level, and a handful of price levels that will determine near term direction.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major indices
FTSE 100
The index failed to hold above November resistance around 9680 and closed with a downside key reversal. Immediate risk is the 50 day moving average at roughly 9625. A deeper test would take price back to the floor of the rising trend channel from earlier this year, near 9550.
On momentum, the RSI has rolled over through the neutral 50 level, which is an ominous sign and increases the chance of another channel floor test. To get the bullish scenario back on track the FTSE needs an end of day close through about 9775, which would reopen a path towards the 10,000 area over the coming month.
DAX
The DAX remains above the broken October line around 24,100, and while still supported it is eyeing the top of its channel near 26,000. Maintaining price above the 50 day line at 24,000 keeps the upside case alive. A weaker outcome would be a move down towards the 200 day area around 23,500.
Dow
The Dow came very close to the channel top and the year end target near 49,000. A confirmed close through 49,000 would suggest an extension up to about 51,300 by the end of January. Support to watch is the 50 day near 47,000.
Cryptocurrencies
Bitcoin
Bitcoin is consolidating, but that consolidation is happening at lower levels after losing old support from April and May around 93,000. There is a red uptrend line from March near 88,000. Two RSI 50 failures and a break below the falling 50 day moving average leave the downside favoured. While price remains above 88,000 there is scope for a spike back toward the 50 day, near 96,500, but the broader bias is weaker until the RSI recovers above neutral.
Ethereum
Ethereum has been relatively stronger. It has already reached the 50 day moving average near 3,269 and while price holds above 3,000 and the recent low at 2,932, the upside could extend toward the 200 day line around 3,561.
Gold
Gold finished the week by breaking recent resistance through the 4,250 zone. Holding above that level and the 50 day moving average keeps the bullish time projection in play for a run toward the November 2024 resistance time projection near 4,600 by the end of next month.
Support to respect is the floor of the October rising trend channel at about 4,106 and the 50 day just below current price. Staying above 4,250 is the ideal scenario for further gains.
Selected smaller stocks to watch
These picks show a mix of rising channels, breakouts and rebounds off lows. Price targets and support levels are short term, typically over the next month.
- Atome, rising channel, top of the channel near 75p, with the rising 200 day around 50p. RSI through 50 supports the bullish case.
- Delta Gold (DGQ), new entrant, looks to have formed a rising channel. Above 15p the market could target around 28p over the coming weeks. Recent candles show strength.
- GSTechnologies, bounced off the lows and showing some bullish divergence. Initial resistance about 0.85p, with a best case toward the falling channel top around 1.09p.
- Hvivo, long under pressure but now bouncing off the falling channel floor. Watch Thursday resistance near 4.75p. Initial resistance about 5.75p, with a stretch target near 6.5p.
- Kromek, in a rising channel since July, above the 50 day near 6.75p. Channel top near 9p is the target while momentum holds.
- Orosur, resistance line from September around 24p, channel mid area near 21p. A break of 24p could project toward 40p over the next one to two months. If momentum fades price may revisit the 18–20p zone.
- Oriole, showing an RSI 50 rebound and clearing the 50 day near 0.27p. On this basis a move to about 0.35p is plausible by the end of next month.
- Nivo, falling wedge breakout through about 0.32p, with the 50 day near 0.42p. Best case returns toward 0.59p if momentum continues.
- Nuformix (NFX), bounce off the floor of the rising channel, higher low than October near 0.17p. While above the channel floor and the 50 day at 0.29p, a move toward 0.40p is possible.
- Phoenix Copper, director buying and a bounce from the falling channel floor near 1.75p. Initial resistance around 2.5p. If cash flows into the story copper and bond activity could push the shares higher.
How to use these levels
- Watch RSI around 50, not just for extremes. Failure through 50 often precedes further weakness, while reclaiming 50 supports a stronger scenario.
- Use the 50 day and 200 day moving averages as dynamic support and resistance. A clear break and hold through these averages changes the bias.
- Define the price that invalidates your idea before entering a trade. For many of the setups above that is the channel floor or a recent swing low.
- Time horizon for most targets given here is the next one to two months. Adjust position size and stop placement accordingly.
Summary
Risk is tilted to the downside on a number of fronts, but pockets of strength remain. Indices need decisive closes through their respective short term resistances to confirm a bullish path. Cryptos are vulnerable while RSI and the 50 day remain under pressure. Gold looks constructive while several smaller stocks are showing interesting setups, either as breakouts or as rebounds off clear support. Keep the 50 and 200 day moving averages in your toolkit and let price guide risk management.
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.
