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, Acuity, African Pioneer, Andrada, Buccaneer, CleanTech, Critical Minerals, East Star, Harena, Orosur, Oxford Biomedica, Panthera, Tertiary Minerals, World Chess.
The week ended messily for the major equity indices, while cryptocurrencies found some welcome late strength. Gold is trying to stabilise, crude remains constructive above key support, and several smaller-cap shares are producing some rather interesting technical setups.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100: Warning Signs Below the Channel
The FTSE 100 did not end the week well. It opened near the high and closed near the low, leaving a distinctly weak daily candle between the July resistance line near 10,840 and the lower boundary of the rising channel around 10,600.
The concern is a decisive break below that March trend line. If that happens, the next likely destination would be the 200-day moving average around 10,400.
The 50-day line is still rising, which is the one encouraging feature. However, an end-of-day close back above the 50-day moving average at 10,749 would be needed to put the bulls back in control. There was such a move on Thursday, but it failed to hold, so the chart remains rather messy.
DAX: A Move Towards the 200-Day Line Looks Possible
The DAX has a very similar look to the FTSE. The index appears to have fallen out of its rising channel around 25,400, and it is also trading below the 50-day moving average near 25,700.
There have been at least two failures around RSI 50, and arguably three. That is not normally the behaviour of a market that is about to break strongly higher.
Below 25,400, the risk is a move towards the 200-day moving average and July support around 24,700. Unless the index can quickly reclaim the 50-day line, that remains the favoured technical scenario for coming sessions.
Dow Jones: Support Around 51,000 to 51,300
The Dow struggled for most of the week, with the interest-rate rise clearly not helping sentiment. The market had already declined from above 54,000 towards 51,000, so much of the concern might have been expected to be priced in. Nevertheless, the weakness continued.
The floor of the rising channel from March comes in around 51,300, while the broader support area sits near 51,000. That is the zone to watch.
If 51,000 gives way, the next technical target would be the 200-day moving average and June support near 50,000. For now, that remains some distance away, but the index needs to hold the current support band to avoid a deeper correction.
Bitcoin and Ethereum: Crypto Ends the Week Strongly
Bitcoin remains range-bound, but upside potential is clear
Bitcoin finished the week strongly but remains within its established 75,000 to 82,000 trading range. A clean break above 83,000 would be significant, opening the way towards the February resistance line near 94,000.
That 94,000 level could be in play by the end of next month, or possibly sooner if the current momentum continues.
On the downside, the preferred support area is around 72,000, where the top of the gap and the rising 50-day moving average converge. Given the strength into the close, however, the immediate focus is on an upside breakout rather than a retreat.
Ethereum attempts a breakout above 2,580
Ethereum is also looking more constructive. The key range ceiling sits around 2,580, and an end-of-day close above that level would point towards 2,900 and the upper boundary of the February price channel.
The 2,350 area appears to have done its job as support, while an RSI rebound from the neutral 50 level adds to the positive picture.
The main downside risk would be a renewed test of the rising 50-day moving average at 2,257. At present, though, the technical bias is towards a move higher.
Gold and WTI Crude Oil
Gold is trying to bounce from its rising channel
Gold is attempting to rebound from the floor of its rising trend channel, which has been in place since June. The rising 50-day moving average near 4,288 is also acting as an important support feature.
There have been intraday moves below that 50-day line, but these have so far looked like bear traps rather than a confirmed breakdown. As long as the price remains above that area, the upside target is the 200-day moving average at 4,541.
The RSI remains on the right side of neutral 50, which is another helpful sign for the bullish case. For additional background on how RSI is commonly used, see Investopedia’s RSI guide.
WTI crude holds above the key $93 level
Crude oil did not fully reflect the geopolitical tension surrounding Saudi Arabia and disruption around the Red Sea towards the end of the week. Even so, the broader chart setup remains constructive while WTI stays above $93.
Near-term support is around $97, followed by $93. Holding above $93 keeps the rising channel from June intact and leaves room for a move towards the upper parallel of that channel, potentially as high as $115 by the end of next month.
Smaller-Cap Shares to Watch
- Acuity: A possible return from the wilderness: Acuity looks as though it may finally be returning to favour after a long period in the wilderness. The rising channel base is around 1.3p, and holding above that level gives scope for a move towards 2.2p by the end of next month. Friday produced a reasonable hammer candle, suggesting the recent pullback may be over. Both the 50-day and 200-day moving averages are rising, with a potential golden cross developing in the coming weeks. That would be another positive technical signal.
- African Pioneer: Triangle breakout targets 3.22p: African Pioneer has been one of the better performers of the year. The shares have broken above the top of a triangle formation at around 2.5p, and the immediate target is 3.22p. Beyond that, the old 2023 resistance level near 3.75p could become a target into the end of next month. Ideally, the 2.5p breakout area now becomes support, with no sustained move back below that level.
- Andrada: Above 6.5p, the target is 9.5p: Andrada has broken out of a mid-move consolidation through 6.5p. The shares have notable celebrity and professional backing, but the chart is what matters here. Above 6.5p, the best-case target is 9.5p, where the upper parallel of the December resistance line comes into play. The absolute minimum requirement is to remain above 6p, although holding above 6.5p would be the preferred outcome.
- Buccaneer: Can it finally deliver?: Buccaneer has been a difficult share to trust, and there has been understandable scepticism about its ability to break higher. It did pull back during the week, but the chart still points to an initial target around 0.17p. A move above that would bring 0.23p into view by the end of next month. The bullish scenario remains valid while the shares hold above 0.12p. The question now is whether Buccaneer can finally deliver the goods.
- CleanTech: A strong setup above a rising 50-day average: CleanTech responded well following an investor lunch during the week. Initial resistance is around 7p, followed by the 200-day moving average at 7.4p. The more ambitious target is 8.45p by the end of next month, representing the post-May resistance area. The setup is particularly attractive because the shares gapped higher and then rose above a rising 50-day moving average without needing to retest it. That type of action can often lead to larger moves.
- Critical Metals: Vertical September move, with 24p in view: Critical Metals has enjoyed a near-vertical move during September. The initial target around 15.25p has been reached, and the next target is 24p. If the shares continue to hold above the 15p to 16p region, there may be scope for a more ambitious move. A potential target as high as 40p by the end of the year can be sketched out, although it would be sensible not to get too carried away after such a sharp rise.
- East Star: Above 8p, an acceleration towards 16p: East Star has reached its second target around 10.4p. Above that level, the chart suggests the potential for an acceleration towards 16p by the end of next month. The key support is the recent initial September resistance around 8p. Staying above that zone should keep the upside case alive.
- Harena: Golden cross setup points to 4.25p: Harena is another professional-investor favourite and is approaching a golden cross between the 50-day and 200-day moving averages. The shares are also close to breaking recent resistance at 3.1p. A sustained move above 3.1p would point towards the top of the range and the upper boundary of the rising trend channel from this time last year, around 4.25p. The stock needs to remain above 3p to maintain that positive outlook.
- Orosur: 26p achieved, 34p becomes the next objective: Orosur looked rather bleak at the beginning of the week, but the turnaround was dramatic. The 26p broadening-triangle target, which had seemed highly ambitious when the shares were trading around 15p to 16p, was reached within just a few sessions. If the shares can now break cleanly above 26p, the next leg higher could target the upper parallel of the triangle near 34p next month. The ideal technical development would be for the share price to remain above the 200-day moving average around 20p. Positive news from El Cedro has helped the momentum, and the chart now needs to consolidate that progress.
- Oxford Biomedica: Resistance at 470p remains the obstacle: Oxford Biomedica has renewed takeover speculation around it, following a private-equity approach earlier in the year. With the shares at lower levels, there may be understandable frustration over where the price now sits. Technically, resistance is around 470p. A break above that level would bring the 50-day moving average near 525p into play. Otherwise, the shares may continue consolidating between roughly 450p and current levels.
- Panthera: Channel breakout points to 32p: Panthera has not been examined for a while, but the chart is beginning to look more interesting. The shares produced a breakout during the week, with 22p acting as the immediate level to clear. Above 22p, the target is the top of the rising trend channel, potentially as high as 32p by the end of next month. A move back below the 200-day moving average at 20p would delay or question the bullish scenario.
- Tertiary Minerals: Momentum builds above 0.08p: Tertiary Minerals appears to be doing exactly what was needed, moving through 0.08p. The next target is the top of the rising trend channel from this time last year, around 0.11p. The chart has a useful gap to the upside and the shares are trading above a rising 50-day moving average. That combination suggests the move may finally have some momentum behind it.
- World Chess: More upside after a sharp move from 0.36p to 0.65p: World Chess is not the most liquid share, so it requires a little care. Even so, the sideways consolidation above a rising 50-day moving average has already produced a strong result, taking the shares from 0.36p to 0.65p since the end of last month. The next target is the upper parallel of the rising trend channel from February, around 0.82p. Given the current pace, that could be seen before the end of the month. Beyond 0.82p, the main resistance area is near 0.96p, which becomes a possible end-of-October target if the momentum continues.
What Matters Most From Here
The major indices are under pressure and need to defend nearby channel support. The FTSE, DAX and Dow all have clearly defined downside levels, with the 200-day moving average becoming increasingly relevant if current support fails.
Crypto is in better shape after a strong finish to the week, with Bitcoin needing to clear 83,000 and Ethereum needing to establish itself above 2,580. Gold and crude also retain constructive setups as long as their respective support levels hold.
Among the smaller caps, the strongest charts are those already above rising 50-day moving averages or breaking from recognisable consolidation patterns. CleanTech, African Pioneer, Andrada, Orosur, Tertiary Minerals and World Chess all have clear levels that should determine whether the upside scenarios continue to develop.
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.
