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, Ethereum, Alkemy, European Metal, First Class, GenIP, Georgina, Mast, Physiomics, Rome Resources, Satsuma, Strategic Minerals, Tialis, Uru Metals.
Markets showed a tentative but constructive tone heading into the end of October. Several major indices and risk assets have signalled fresh upside while a number of small caps on my watchlist are giving clear technical clues. Below I run through the key charts, the levels I am watching and the likely targets over the coming month if the current technical set ups hold.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Major indices
FTSE 100
The FTSE is powering higher after an RSI 50 rebound. We have moved above the recent peak at 9,577 and the next obvious objective is the top of the June channel near 9,680. A best case scenario projects resistance up toward the May resistance line around 9,830 by the end of November, provided we remain above that 9,577 pivot.
DAX
The DAX has been a little more subdued but it is at least holding above the 50 day moving average. We have recorded an RSI 50 rebound, albeit a flat one, so the hope is that it starts to respond to broader market bullishness. Staying above the 24,000 area opens up a retest of the record highs at 24,700 and then a stretch toward 26,000 by the end of next month. The channel floor to defend is around 23,600.
Dow
The Dow looks ready to push toward the top of the rising May 2024 trend channel. The immediate technical condition to maintain is staying above the 50 day line near 45,000. With recent support around 46,500 still intact and an RSI rebound into the mid 50s, a move toward the channel top around 48,100 becomes the logical next target.
Cryptocurrencies
Bitcoin
Bitcoin has steadied around the 200 day moving average, roughly near 108 (units as per chart). A break above the 50 day near 114 would be constructive. We have already seen an RSI 50 break which suggests the energy to challenge previous highs. A run toward 126 during November is possible while the lower edge of the channel around 104 and the 200 day near 108 hold.
Ethereum
Ethereum is a little disappointing relative to bitcoin but it has held the April uptrend line, currently near 3,760. The 50 day is around 4,220 and the key near term trigger would be getting back above RSI 50 (we are near 47 now). If the uptrend holds, a move to the August resistance near 4,600 in November is possible. Worst case is a retest of August support near 3,370 or the lower falling channel area around 3,550.
Commodities
Gold
Gold briefly dipped toward the low 4,000s but did not break materially below the support I was watching. The low on Friday printed around 4,066, which is encouraging for bulls. If that support holds, the metal has a chance to retest record levels with a best case toward 4,500.
Final thoughts
The broad picture is constructive: major indices are showing RSI and moving average improvements and many small caps are producing clean technical signals. That said, the trade remains conditional. Staying above the key moving averages and channel floors mentioned for each name is critical to retain the upside bias. I will continue to monitor these charts and adjust levels as price action evolves.
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.
