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, Avacta, Contango, Forgent, Headlam, Jersey, ImmuPharma, Petrel, Quartix, Reach, Tooru, Tristel, TM1, Tracsis.
The broad technical backdrop remains more constructive than it may feel. There is still plenty to worry about, from tariffs to Iran and everything else in between, but a number of major markets are holding above rising 50-day moving averages and producing RSI rebounds above the neutral 50 area. Those are generally decent leading indicators on the upside.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
That does not mean every chart is a buy, nor that targets will necessarily arrive on schedule. It does mean there are some important levels to watch, particularly where price is holding trend support while momentum begins to improve.
FTSE 100: 10,750 Is the Key Breakout Level
The FTSE 100 appears to be finding support around the top of the old falling trend channel from March, near 10,610. The encouraging feature is that the index has repeatedly found lows above its rising 50 day moving average.
Momentum has helped too. The RSI has rebounded through 50 and reached around 57, adding to the positive setup seen earlier in the month.
The level that matters is 10,750 on an end of day close basis. A sustained break would put February resistance near 10,950 in play, followed by the top of the rising March channel around 11,000 by the end of the following month.
As long as the index remains on the right side of 10,600, the bullish case stays alive. Even a hold above the rising channel floor and 50 day line around 10,469 would preserve the underlying positive structure.
DAX and Dow: Still Holding the Uptrend
DAX
The DAX is in a slightly ropey position relative to the FTSE, having threatened to break below the floor of its rising March trend channel near 24,800. Thursday produced a scare, but the market recovered to close above the 50 day average at 24,941.
Holding above that area leaves room for a gap fill towards 25,500, even if there is another pullback first. The more ambitious upside target is 26,300 by the end of the following month. It is a wall of worry market, but markets can still climb a wall of worry.
Dow
The Dow made a decent attempt to regain 52,000, though it fell just short on Friday. The important positive was the bounce above the rising 50 day line around 51,400.
For a more convincing bullish signal, the Dow needs to close above the gap at 52,400 and break earlier-month resistance at 52,600. On the downside, the expectation is still for support to come in around the 50 day average and the rising uptrend line from April.
Bitcoin and Ethereum: Frustrating, but Not Broken
Bitcoin
Bitcoin has been frustrating. There have been repeated attempts to clear mid-June resistance at 67,000, and so far each one has failed. However, the price remains above a rising 50 day moving average near 63,100.
That rising average is the main reason not to get too gloomy. While Bitcoin stays above it, there remains a chance of another break above 67,000, which could open the way towards the 200 day line at 72,300 by the end of the following month. It is a punchy call, but the technical possibility is still there.
Ethereum
Ethereum has looked like a rather dead market for some time, notwithstanding the occasional burst of excitement. Still, it has bounced above its rising 50 day line, which is a positive development.
The obstacle is 1,950. Ethereum needs to clear that level to have a realistic chance of moving towards its 200 day average at 2,145. It failed at that area in April and May, and also in December and January, so there is plenty of overhead resistance.
The RSI is above neutral at around 54, which is a small positive and, on this measure at least, a better reading than Bitcoin.
Gold and WTI Crude Oil
Gold
Gold has behaved in an odd fashion, with more war apparently coinciding with weakness and less war coinciding with strength. The main technical level remains 4,220, which also lines up with resistance from the end of January.
While gold is below 4,220, there is still a risk of a final test of the 3,900 area. That zone has acted as post-October support and remains the level to watch on the downside.
WTI Crude
Crude looked as though it might push through 87 and head for June resistance at 97, but Friday brought a pullback and an inside day. Above 87, the 97 target remains valid.
Below 87, a more conservative path would be a retest of the 50 day line near $83 before another attempt higher. The 200 day average is still rising, while the RSI is above 50 but below overbought territory. Both factors keep the bias tilted to the upside.
Small-Cap Technical Setups
- Avacta: Watching the 70.75p Barrier: Avacta has pushed back above its 200 day moving average at 69.25p and broken resistance that had been in place since May. The remaining hurdle is around 70.75p. A break through that resistance could mark the start of a fresh leg higher, with 80p a possible end-of-next-month target. The proviso is simple: the shares need to remain above recent support at 67p, and any fundraise risk remains relevant.
- Contango Holdings: A Potential End to the Disappointment Phase: Contango has been a serial disappointment, but the latest chart setup is more promising. Multiple RSI support points developed from June into early July, while the price has broken neckline resistance at 0.48p. Above 0.48p, old May and June support near 0.66p becomes the obvious target, even if the shares later fall back. It is a reasonable setup, albeit one that still needs to prove it can last.
- Forgent: High Risk, but an RSI Trend Is Holding: Forgent is firmly in the category where angels fear to tread. Nevertheless, there is an RSI uptrend from April that has been tested several times, and that is not something to ignore. Price action may also be working within a rising channel, with the upper boundary pointing back towards recent 0.02p resistance. While the RSI trend and price support around 0.014p remain intact, there could be scope for another move above 0.02p. This is very much not a blue-chip situation.
- Headlam: A Falling Knife With an Oversold RSI: Headlam has continued its painful decline, with a support projection from last September pointing towards the 4.5p to 5p area. The notable feature is how extremely oversold the RSI has become, matching readings seen back in 2023. That alone does not make the shares safe. The first recovery signal would be a break back above Friday resistance around 8.25p. Until then, this remains a classic falling-knife situation.
- Jersey Oil and Orcadian: North Sea Names Back on the Radar: Jersey Oil is showing what looks like a V-shaped bull flag with a period of consolidation in the middle. It has bounced above the 200 day average and produced an RSI rebound above 50. While Friday support near 120p holds, the best-case target is £1.60 by the end of the following month. The story may be helped by hopes surrounding a reopening of the North Sea.
- Orcadian has a similar technical profile: with a V-shaped bull flag and both the 50 and 200 day moving averages rising. After finding support around 17p, it is back above January resistance at 18p. Above that level, the top of the rising channel from October points towards 30p. As with Jersey Oil, North Sea developments could have a major influence.
- Petrel Resources: Breakouts and Bullish Divergence: Petrel has broken recent resistance around 0.9p. Above that level, the top of the falling channel from the start of last year sits near 1.25p. There is not much chart history to work with, but the shares have looked keen to move higher over recent sessions.
- Quartix Technologies: has broken a resistance line from January at the same level as its 50 day moving average. That puts the 200 day average near 2.65p in focus. A break above it could allow a more substantial recovery towards 280p to fill the April gap. There is bullish divergence too: price made lower lows during July while the RSI made higher lows. While the shares stay above 240p, the recovery argument remains valid.
- ImmuPharma: A Double Technical Positive: ImmuPharma has a rising 50 day moving average near the lows and an RSI rebound through 50. Taken together, that is close to a double buy signal on the chart. That pattern gives scope for a move towards 5.8p by the end of the following month. The view is entirely technical and does not depend on any possible announcement concerning P140 or anything else.
- Reach Bottom-Fishing Candidates: Reach may appeal to those who like bottom fishing. The old falling-channel level at 43p should have marked the low, but the market has slipped beneath it and reached 40p. If Friday’s low proves to be the low, or close to it, a rebound into the upper 40s is possible, with 48p corresponding to May support.
- Tooru responded well to a positive Friday update: The shares moved above the 50 day line at 0.16p for the first time since February, with the top of the falling channel around 0.22p as the initial target. Bullish divergence supports the case, with a lower price low last week but no corresponding RSI low.
- Tristel had a good update this week: Tristel has broken all recent resistance around 443p and set fresh highs for the year. As long as it remains above 443p on an end of day closing basis, the top of the channel near 470p is the next obvious target.
- Technology Minerals has made a sharp handbrake turn: After the board appointment of Callum Sommerton. The chart had gapped down in June and has now gapped higher. Above 0.043p, there is scope for a move towards old resistance at 0.06p. It is not one for widows and orphans, but the technical improvement is clear.
- Tracsis has broken recent resistance at 360p: Above that area, the top of the rising trend channel points towards 420p by the end of the following month. The RSI breakout around 53 has been the real catalyst, and the hope is that the shares can build on it.
Levels Matter More Than Headlines
The common thread across the more constructive charts is straightforward: rising moving averages, support holding where it should, RSI rebounds above 50 and breaks through established resistance. None of these factors removes risk, particularly in illiquid small caps, but they provide a technical framework.
For the bigger markets, the FTSE above 10,600, the DAX above its 50 day average and Bitcoin above 63,100 are the key foundations. For smaller stocks, the focus should remain on whether each breakout level holds on a closing basis. If the support goes, the setup changes. If it holds, the upside targets remain live.
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.
