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, Arc Minerals, Eco (Atlantic) European Metals, Hot Rocks, Panther Metals, Quantum Helium, RC Fomax, Solvonis, Strategic Minerals, and WeCap.
Markets are showing signs of leadership from a handful of technical signals that have flipped from defensive to constructive.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Multiple RSI 50 rebounds, trendline breaks and support held above rising moving averages are the recurring themes. Below is a concise, practical guide to what to watch next for the major indices, crypto, gold and a selection of smaller stocks where the chart setups look interesting right now.
Major Indices
FTSE 100
The FTSE 100 has enjoyed a string of bullish indicators: a triple RSI 50 rebound, a break of a falling trendline around 9,680 and support above a rising 50 day moving average. Price is now above the recent resistance zone near 9,770.
- Near term target: 10,000, with the channel top as high as 10,100.
- Timing: possible by the end of the month to end of next month.
- Key risk: failure to hold above 9,770 would undermine this bullish near term case.
DAX
The DAX is firmer after an RSI 50 bounce and the break of the October resistance near 24,100. The market looks perky compared with recent weakness.
- Near term: 24,700 area is plausible in the coming days.
- Big picture: upside towards 26,000 to 26,200 if global risk sentiment extends.
- Downside buffer: hope is that any pullback finds support around the 200 day line near 23,500.
Dow Jones
After some chop around 48,000, the Dow has pushed back up and now shows multiple RSI 50 plus rebounds, a constructive pattern that can fuel further upside.
- Short term: 49,000 within a week or two is realistic.
- Upside projection: a run to 50,000 and possibly up to 51,300 by February if momentum accelerates.
- Pullback level: a rug pull toward the 50 day moving average near 47,000 would offer a buying opportunity.
Cryptocurrencies: testing key lines
Bitcoin
Bitcoin is attempting to reassert itself after autumn weakness. It is approaching the October resistance line around 90,000 and sits in a recent range.
- Near term target: 95,000 within the current range if momentum holds.
- Key level to clear: the October resistance line near 90,000 is required for broader confidence.
- Support: a dip to the bottom of the channel around 81,000 would be a potential opportunity for those looking to add.
Ethereum
Ethereum has bounced from an April uptrend line around 2,800 and is aiming for the 50 day moving average at roughly 3,143. Momentum remains muted because the RSI is still below neutral 50.
- Next hurdle: sustained trading above 3,143 to make a run toward the 200 day moving average at about 3,571 by the end of next month.
- Downside risk: a rug pull toward November support near 2,622 would negate the immediate upside thesis.
Gold
Gold has been strong, clearing the 4,270 resistance zone and retesting recent record levels. The technical projection points toward the November 2024 resistance line near 4,640 if the current pace continues.
- Immediate retest: previous record levels around 4,380 are the first port of call on pullbacks.
- Projection: 4,640 by the end of next month if momentum persists.
Small Caps
Several junior miners and microcaps are showing compelling setups. Many patterns are classic breakout or midmove consolidation shapes, and several are supported by rising 50 day or 200 day averages.
Arc Minerals
Management changes sparked a move, and the stock is holding most gains above the 50 day line close to 0.52p. The bottom of an October gap near 0.85p is an initial target by the end of next month.
Eco Atlantic
After hitting a resistance target drawn from long experience, the stock retested that level. Staying above roughly 18 to 19 pence keeps the bullish case alive. A break through 25 pence could extend toward 45 pence by end of February.
European Metal Holdings
A midmove consolidation breakout through the old peak near 23.6 pence points to a new leg up. Targets in the near term are 30 pence plus with a stretch target around 40 pence.
Hot Rocks
Sideways action above a rising 50 day line, with both 50 and 200 day averages sloping up, suggests an imminent breakout through November resistance at about 1.75 pence. A move to 3 pence by February is plausible while price stays above the channel floor close to 1.25 pence.
Quantum Helium
A gap higher puts the stock in a positive position. Holding above the 200 day average near 0.31 pence is important. Look for a run through 0.40 to 0.45 and possibly toward 0.60 pence if momentum continues.
Panther Metals
Price has reclaimed the rising 200 day moving average just under 60 pence. More end of day closes above that level point to a move toward the summer falling channel top at about 88 pence. A break below the 50 day at 56 pence would be a warning sign.
RC Fornax
Two recent gaps to the upside and a break of resistance around 8 pence make this one to watch. The initial target is the top of the falling channel from July at about 14 pence by the end of next month.
Solvonis
The stock looks set for another leg up after bear trap rebounds from below the rising 200 day average. An end of day close above the 50 day would be the clean trigger for a run toward the channel top near 0.45 pence.
Strategic Minerals
W shaped rebounds off the channel floor and a strong close above the 50 day near 1.32 pence suggest upside. Recent resistance near 1.45 pence looks ready to break with a target toward 2.4 pence by the end of February.
WeCap
The stock has bounced from the channel floor near 1.6 pence and the 200 day moving average. The missing element is a return of the RSI above neutral 50. If that happens, the path toward a retest of 4 pence in January or February becomes realistic.
Key technical themes and practical takeaways
- RSI 50 rebounds matter – multiple rebounds above 50 across different assets have been useful leading indicators for renewed upside.
- Rising moving averages provide structural support – trades that hold above the 50 day or 200 day lines carry a higher probability of follow through.
- Watch the key lines – for indices, those are recent resistance breaks around 9,770 for the FTSE, 24,100 for the DAX and 48,000 for the Dow. For crypto and gold, the October resistance lines and the 50 day / 200 day moving averages are the critical gates.
- Risk management – rug pulls are a real risk. Use stop levels around the 50 day or 200 day lines noted above to protect capital and look to add on dips that remain above these rising averages.
“The key here is staying above those support zones and moving averages. If they hold, the path higher is clear. If they do not, reassess quickly.”
Final thought
Several markets look constructive on a technical basis. Pay attention to the RSI 50 flips, whether price remains above rising 50 day or 200 day averages and the specific resistance lines noted. Those elements will separate sustainable rallies from short lived pop and fade moves.
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.
