Zak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today’s charts are the FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, WTI Crude Oil, Accesso, Blackbird, Critical Metals, CMC, EnSilica, 80 Mile, Fragrant Prosperity, GCM, Helix, Huddled, Reveille, RentGuarantor, THG.
The FTSE 100 and DAX are making a decent attempt to shed their early October weakness, while the Dow still has a little more to prove. Cryptocurrencies remain in consolidation mode, gold needs a proper breakout, and crude oil has suddenly found rather more enthusiasm.
As always, do your own research and treat these as chart-based observations rather than hard recommendations
Equity Indices: The FTSE and DAX Lead the Recovery
FTSE 100: A Route Towards 11,000
The FTSE 100 has recovered strongly from its early October lows towards 10,400. Given the wider backdrop, that strength may be something of a surprise, but the chart is doing the talking.
The index is above both its July resistance line and the 50-day moving average at 10,716. While that remains the case, the objective is the top of the channel towards 11,000, which would represent a record high. No doubt the government would be happy to take the credit.
A close back below the 50-day average would weaken the immediate upside case. Even then, the downside reference at this stage is the 200-day moving average around 10,500, rather than a substantially deeper retreat.
DAX: Clearing 25,700 Would Open Up the Highs
The DAX has a similar look to the FTSE. It has broken its recent resistance line around 25,300, bringing the 50-day moving average near 25,700 into play.
A sustained move through that average would put the all-time highs around 26,500 back on the agenda, potentially by the end of November. This has not been the fastest-moving market, so a little patience may be required.
The relative strength index, or RSI, has pushed into the mid-50s, a useful position for a fresh move higher. On a setback, the broken September resistance line is the preferred support area. A more substantial pullback would bring the 200-day average around 24,900 into focus.
Dow: Still Waiting for a Cleaner Break
The Dow is not quite as sparkling as its European counterparts, but it remains close to its 50-day moving average at 52,400.
Above that level, the top of the rising channel drawn from April provides an objective around 54,300. That could arrive by the end of October, although the consolidation already seen makes the end of November a more generous allowance.
Uncertainty around the approaching US midterm elections may also encourage the market to pause. If the recovery gives way to a sharper reversal, the April channel floor around 51,000 is the main downside reference.
Bitcoin and Ethereum: Consolidation, Not Yet Conviction
Bitcoin: The 50-Day Average Is the Immediate Test
Bitcoin is consolidating close to its 50-day moving average at 81,550. Above that, the upper end of the September and October range around 87,000 is the upside objective by the end of October.
If the consolidation breaks down, the support zone is around 75,000. That was September’s support and also marks the floor of the range established after August.
For anyone wanting a cleaner momentum trigger, an end-of-day RSI close back above neutral 50 is worth noting. The price uptrend line has been less clear-cut after several weeks of choppy trading, making momentum confirmation particularly useful here.
Ethereum: Support at 2,380 Has Work to Do
Ethereum is the slightly weaker version of the same story. It remains below its 50-day moving average around 2,547 and is sitting near the bottom of its post-August range at approximately 2,380.
While 2,380 holds, it remains the chart’s buying zone, with a recovery towards 2,550 and the 50-day average the first objective. That would take price back towards the upper boundary of the earlier range it has re-entered during October.
The risk is that Ethereum spends too long below a declining 50-day average. If support gives way, the 200-day moving average near 2,141 becomes the more bearish reference, potentially before the end of October or November.
Gold and Crude Oil: Two Very Different Charts
Gold: A Close Above 4,180 Is Needed
Gold has been hard work recently. Rather than a convincing trend, it has offered a fairly lifeless stretch of trading.
The rising support line from late June runs around 4,100. Above that, the immediate task is to break the resistance line drawn from August, with an end-of-day close above roughly 4,180 providing the clearer trigger.
That would open the way towards the 50-day moving average around 4,334 to 4,340. Reaching it by the end of October would be a respectable result given the recent lack of progress.
Below 4,100, the risk shifts towards 4,000.
Crude Oil: A Strong Reversal Puts $108 in Play
Crude oil finished the week with a strong reversal to the upside. The immediate task is to fill the gap towards $99. Above that, the next projection is $108 by the end of October.
Support above a rising 50-day moving average gives this move a stronger technical foundation. If there is a pullback, that average around $90.60 is the potential intraday buying zone.
A powerful oil rally would not normally sound especially helpful for equities. For now, however, the indices appear willing to move higher alongside it. The apparent decoupling is worth keeping in mind rather than assuming one market must immediately spoil the other’s progress.
Smaller-Cap Shares to Watch
- Accesso: Slowly Getting There: Accesso is not threatening to become the fastest share in the market, but the chart is gradually improving. The price has found support above a 50-day moving average that has only just started rising, while the RSI moved above neutral 50 during the previous week. The key condition is to remain above recently broken resistance at 310p. Above that, the objective is 375p by the end of November. The newly rising average is the encouraging part of the setup.
- Blackbird: A Very Lively Week: Blackbird rose approximately 94% over the week, with its inclusion in Google Chromebook Perks providing the apparent catalyst. It would be tempting to claim the recent company interview did all the work, but that might be a little unfair on the business. The chart has already worked through earlier objectives around 2p and 3.1p, with the gap towards 4.2p filled during the advance. The next more substantial reference is the old May 2025 resistance around 5.25p. Ideally, the shares now hold above the previous target area around 3.15p, supporting a further move towards 5.25p by the end of November.
- Critical Metals: Four Targets Hit, With 84p Next: Critical Metals has behaved wonderfully from a charting perspective. The bullish setup emerged below 10p, and the shares have subsequently reached four successive targets. The company may have said it knew of no reason for the rise, but the technical pattern has been rather more forthcoming. The rally began in September with the price moving above a rising 50-day average, exactly the setup to favour. With the fourth target at 53p cleared, the next projection is 84p by the end of November, provided the shares remain above that former objective.
- CMC Markets: Looking Towards £8.80: CMC Markets is showing considerably more resilience than the weakness seen at IG. The shares have already worked through the earlier resistance lines, leaving the rising channel from July as the main guide. The requirement is to hold recent support around 640p. Above that, the top of the channel points towards £8.80 by the end of November. CMC is one of the stronger-looking names in its area at present.
- EnSilica: Holding the Gap at 76p: EnSilica is bouncing around a rising 50-day moving average, but the more interesting feature is the upside gap created at the beginning of October. The shares have held the top of that gap at 76p. While that remains intact, the minimum objective is 90p, potentially by the end of October. Recent contract wins and the final results released at the start of the month provide the company backdrop. Whether another contract announcement follows is speculation; the usable chart evidence is the gap holding.
- 80 Mile: Recovery From the August Reversal: 80 Mile suffered a sharp reversal in August, but the recovery has established support around the top of the gap at 0.9p, close to the 200-day moving average. Above that area, the projection is a full retest of recent resistance around 1.75p by the end of November. It is a punchy target, but this has been a punchy chart. Both the 50-day and 200-day averages are rising, with a golden cross anticipated before the end of October. A golden cross occurs when the shorter moving average crosses above the longer one. Here, it would add another constructive feature to the recovery.
- Fragrant Prosperity: A Breakout While the Deal Wait Continues: The anticipated event at Fragrant Prosperity remains a deal for the SPAC. So far, however, it has been a director’s resignation that coincided with the share-price spike. The shares have broken a resistance line stretching back to the previous autumn around 0.45p. Above that level, the minimum projection is 0.67p, with the upper objective at 0.91p by the end of November. The technical breakout and the hoped-for corporate transaction are separate issues. The chart levels are available now; the deal remains something to wait for.
- GCM: The Remaining Target Is 25p: GCM has been one of the standout charts of the year, reaching a series of earlier targets. The remaining upside objective is around 25p by the end of November. The main condition is to stay above the rising channel floor near 15p. The 50-day moving average sits just below that area, adding another nearby reference for the trend.
- Helix: A Gap Through Resistance: Helix delivered an encouraging update during the week, including plans to restart production at Rudyard. For anyone who had not realised production had stopped, the restart wording may have come as something of a surprise. Technically, the shares have bounced from a rising 50-day average, gapped above it and pushed through resistance. That is a useful combination, reinforced by an RSI rebound above 50. While the price stays above the 50-day average, the minimum objective is the 200-day moving average around 31p. Beyond that, 35p is the target by the end of October, corresponding to former support lost during the decline.
- Huddled: A Close Above 0.9p Would Help: Huddled has quietly maintained a constructive pattern, repeatedly finding support above a rising 50-day moving average since early August. The next trigger is an end-of-day close above 0.9p. That would point towards 1.31p, potentially by the end of October, with the end of November allowing more time. The bullish structure depends on holding recent support at 0.75p.
- Reveille: From 7p to 17p, With 26p the Stretch Target: The bullish chart call on Reveille dates back to 24 September. The shares subsequently held above their 50-day moving average, which began rising more decisively around 5 October, when the price was near 7p. By Friday, the shares had reached 17p, hitting the earlier 16.6p target. Full marks to the chart on that move. The next projection is less firmly established because there is limited chart material at these higher levels. Nevertheless, an upper parallel suggests a best-case objective around 26p by the end of November, while the shares remain above 14p.
- RentGuarantor: Strong, but Confirmation Would Be Useful: RentGuarantor has bounced from the floor of its gap around 95p. Above that, the rising channel from June points towards £1.30 by the end of November. That is another ambitious projection, although the share has already shown it can deliver strong moves. A more cautious approach would be to wait for an end-of-day close above approximately £1.05 before treating £1.30 as the active objective. An RSI rebound around neutral 50 would strengthen the case. A move below the 50-day average, currently around 87p, would do more meaningful damage to the uptrend.
- THG: The Recovery Is Becoming More Convincing: THG may not have been a universally popular name, but the chart is reviving rather well. Unfilled upside gaps have carried the shares through the 50-day moving average, followed by a move above the 200-day average just below 33p. While the price remains above the 50-day average around 30p, the minimum objective is 38p by the end of October. That is the upper boundary of the broadening triangle drawn from June. Beyond that sits the old April peak at 42p, the next obvious reference if the recovery continues over the coming days and weeks.
The Levels Matter More Than the Enthusiasm
There is plenty of constructive price action across this rundown, particularly where shares are holding above rising 50-day averages. The FTSE and DAX also look better placed than they did at the start of October.
But the targets only make sense alongside their conditions. Bitcoin needs to regain its average, Ethereum needs to hold its range floor, gold needs a closing breakout, and the stronger small-cap charts need to retain their newly established support.
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.
