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, African Pioneer, Arc, Andrada, Alkemy, Bezant, Enquest, Finseta, MedPal, Neo Energy, Rc365, Shuka, Team Internet, Tungsten West, Unicorn, Victoria.
The end of the week gave traders quite a lot to work with. Some markets finished with clean bullish candles, some are still trapped beneath awkward resistance, and a few have drifted into plain disappointment. But there are still enough constructive setups around to keep things interesting.
What follows is a full charting sweep across the major indices, crypto, commodities, and a batch of UK small caps that are either breaking out, trying to break out, or setting up for a move.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100: Friday’s strength points to a breakout attempt
The FTSE 100 ended Friday in the sort of fashion chartists tend to like. It opened near the low and finished at the high, which usually raises the chances of follow-through at the start of the next session.
The one thing missing was a decisive close above the red resistance line. That did not quite happen, so the market still has a small technical hurdle to clear. Assuming that line gives way early in the new week, the next target looks like a retest of the April resistance area around 10,700.
The more ambitious target for the end of the month would be the top of the rising trend channel in place since October, which comes in around 10,900.
The near term line in the sand is the sharply rising 50 day moving average near 10,400. A close back below that would delay the push higher. If things turn weaker, the fallback scenario is another test of the support line dating back to March, a level that has already been checked several times through April, May, and again this month.
DAX: Still inside a rising channel, still constructive
The DAX has been a bit livelier, but the broader setup still looks encouraging. After the false break above the January resistance line, the market pulled back into what looks like a fairly normal correction. That drop found support around the 200 day moving average, which was the key area to hold.
Price remains inside a rising trend channel that has been in place since March. If the index can clear the January resistance around 25,000, the chart projection points towards 26,300 by the end of the month, helped by the old November resistance projection and the upper boundary of the channel.
There are a few extra positives here:
- The RSI has pushed back above the neutral 50 level.
- Both the 50 day and 200 day moving averages are rising.
- The market has recently gone through a golden cross.
That is generally the sort of backdrop bulls want to see.
Dow: Bear trap dip looks to have run its course
The Dow joined the late-week rebound and, importantly, has bounced back above a rising 50 day moving average. There is also a support line in place from April, effectively the lower boundary of the current channel, around the 50,000 area.
While the index stays above 50,000, the minimum target looks like 52,000, which is the top of the rising April trend channel. A stronger move could stretch to 53,400 by month end, based on the projection from the November resistance line.
The two day dip in midweek now looks more like a classic shakeout than the start of something more sinister. The RSI rebounded from just below 50, and that suggests momentum may be turning back in favour of the upside.
Bitcoin: Still the weakest of the major markets
Crypto has lagged behind the bigger equity indices, and Bitcoin is still not out of the woods. The key issue is that it remains below the old March support zone at 65,000.
While price stays under that level, there is still a meaningful risk of another move towards 60,000, or even lower. If Bitcoin can reclaim 65,000, the aim would then be to work back into the rising channel from February, which currently points towards levels above 70,000.
At the moment, this is still a market that needs to prove itself.
Ethereum: Support turned resistance is the problem
Ethereum is in a similar position, with one particularly awkward detail on the chart. The important reference level is the February low around 1,753. Price has been drifting below that area and the recent resistance is sitting near 1,710.
That gap between former support and new resistance is not especially encouraging. It suggests a market that is consolidating, but not yet doing so with much authority.
If buyers cannot regain control, there is a risk of another leg down, or at least a retest of the recent support area near 1,500.
Gold: Bear trap bounce, but still damaged
Gold has not exactly covered itself in glory either, although there is a hint of recovery after a bear trap move below the March support area around 1,498.
That rebound has at least put some momentum back into the market, and the first upside objective is the recent resistance around 1,543 to 1,560. Even if the metal struggles after that, a bounce into that zone would make technical sense.
The problem is that gold has broken below the 200 day moving average in dramatic fashion, and getting back above that measure may take time and effort.
If weakness returns, the worst case on the current chart is a move towards the floor of the falling trend channel from January, which comes in around 1,380.5.
WTI Crude Oil: Deflating inside a falling channel
Crude oil has been losing pressure and the chart reflects that. Price has been sliding in a falling trend channel, and the focus had been on a move down to the floor of that channel around $82. That would amount to a retest of April support just below $81.
The concern now is that a break below 81 opens the door to a deeper move, potentially back to the 200 day moving average near $73.43.
As for the upside, expectations are fairly restrained for now. The area around $88 looks like the upper limit of what this market can reasonably manage in its current state.
Final thoughts
The broad picture is mixed, but not muddled. Equity indices still look constructive, especially the FTSE 100, DAX and Dow, provided key support levels continue to hold. Crypto remains the weakest pocket of the market. Gold and oil are trying to stabilise, but both still have work to do.
Among the smaller shares, there are several technically interesting setups built around rising moving averages, golden crosses, bear trap reversals, and sideways consolidations above support. Those are often the ingredients that matter most when momentum starts to build.
The next few sessions should tell us which of these patterns are ready to deliver and which still need more patience.
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.
