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, Amazing AI, African Pioneer, Atlas Metals, Fragrant Prosperity, Genedrive, Hamak, Valereum, Xeros.
A quick technical run-through of the major indices, cryptocurrencies, gold and a clutch of small caps that caught my eye heading into November. Below I cover levels to watch, likely targets and what would change the picture on both the upside and the downside.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
Market snapshot
FTSE 100
The Footsie is still enjoying what looks like a Santa Claus style rally to record highs. We have pulled back to the top of the old June trend channel near 9,720, which is where we closed on Friday.
- Immediate upside: staying above 9,720 opens a path to 9,830 by the end of this month.
- Near-term support: midweek support around 9,650 is the zone to hold for the constructive case.
- Downside risk: worst case is a re-test of the prior peak near 9,577 from early last month.
DAX
The German index is looking more vulnerable. We have lost the RSI 50 level and the RSI sits around 44, while price is struggling below the falling 50-day moving average.
- Near-term floor: the April rising trend channel provides support around 23,800.
- Deeper support: the 200-day line sits near 23,300 and could be tested if weakness continues.
- Upside case: a break back above recent resistance at 24,400 would open a run toward 26,000 by year end, although the price action has been remarkably slow.
Dow
The Dow has backed off slightly but remains positioned within the rising May 2024 price channel. While we stay above the old October resistance near 47,000, the minimum target is 48,300 — the top of that channel.
- Target: 48,300 by the end of this month, assuming the channel holds.
- Context: a solid achievement given the macro backdrop and tariff concerns.
Cryptocurrencies
Bitcoin
Bitcoin has bounced for a second time at the top of a falling trend channel and is currently sitting around the 200-day line in the 109 range, with recent October resistance near 116.
- Key condition: an end of day close through 116 and a move back above RSI 50 would materially change the picture and reduce the probability of further consolidation at the lower end of the range.
- Support: the floor of the falling channel traces back to March near 107.
- Current caution: RSI is around 46 so momentum remains tilted to the downside until proved otherwise.
Ethereum
Ethereum’s main battle is to reclaim the 4,000 level. The April support line has been broken and the RSI remains under neutral 50, with an RSI resistance line near 54 acting as a headwind.
- Near-term support: 3,750 is the pivot. Staying above that would allow a move toward the 50-day at about 4,165.
- Downside risk: a breakdown would likely test the 200-day line and August support near 3,380, the favoured destination on a mini-breakdown.
- Positioning: while RSI stays below 54 this looks like a “sell into strength” market rather than a buy-the-dip opportunity.
Gold
Gold has had a healthy bounce so far, clearing a rising 50-day line around 3,809 and recovering an RSI 50 rebound.
- Near-term: as long as price remains above the 3,900 area, 4,170 is the immediate resistance target to aim for.
- Interpretation: the bounce above the 50-day is constructive, suggesting buyers are present after the pullback.
Selected small caps and micro caps
Below are the small cap names I reviewed with their key technicals and scenarios to watch.
Amazing AI
A bit of recovery here, which goes against the grain of some peers. The shares sit in a rising trend channel with the floor near 1 pence and the 50-day line rising around 1.25p.
- Trigger: an end of day close above the 50-day would open a move back up to the top of the range.
- Resistance: recent peaks sit around 1.4p and there is a gap above the 50-day up to that level.
- Target: 2p by the end of the month is possible if momentum picks up, but the stock closed well below 0.9p recently which delays the recovery story.
African Pioneer
Looking robust. We saw a bear trap rebound from below the rising 50-day line and a push toward the top of the broadening triangle near 1.8p this month.
- Structure: the rebound is convincing and keeps the bullish case intact for the near term.
Atlas Metals Group
Atlas broke out of the identified triangle at about 35p and has accelerated higher. The initial target of 70p has effectively been reached by the end of the month, retesting October resistance.
- Momentum: RSI remained above neutral 50 throughout the move, which is a healthy sign for continuation.
- Action: maintain the position while the RSI and price structure remain constructive.
Fragrant Prosperity
Activity picked up with a flurry of TR1s during the week. The share price has broken out of a falling trend channel around 82p and is aiming for the top of the triangle and post-June resistance near 1.4p.
- Key levels: 200-day line near 1.31p provides a minimum level to hold.
- Upside: a best case scenario would be toward 1.88p by the end of next month while price remains above the broken 85p resistance.
- Context: watch for any shareholder loan news which was mentioned as a prospective catalyst.
Genedrive
There was discussion around prospect of a shareholder loan and technicals clustered around the 200-day line 1.13p. If price holds the 200-day the longer term targets become plausible, otherwise downside risk increases.
Hamak Strategy
We have a bit of revival. After a long pullback from the early August highs the stock produced a bear trap rebound from below the July/October support at about 1.35p.
- Support: 1.35p is the key zone to remain above.
- Targets: the 200-day line sits around 1.88p and an optimistic near-term target might be around 3p, though that is early days.
Valereum
Nice turnaround. Shares nearly hit the initial target and in fact did trade up to around 7.75p at the top of the falling trend channel.
- Next step: another close higher would put 14p on the table, which is the upper parallel of the falling channel.
- Interpretation: the chart suggested this recovery and it is playing out cleanly so far.
Xeros
Gaps to the upside have appeared and price is heading back to the top of the channel that traces to August of last year, near 2.75p.
- Condition: while price stays above recent broken resistance at about 1.8p we can hope for a run toward that channel top in early November.
Summary and what I am watching next
The big-picture themes are clear. Equity indices are mixed with the FTSE still in a bullish channel, the DAX showing more vulnerability and the Dow still aiming for the channel top. Bitcoin and Ethereum need clean RSI and moving average breaks to validate renewed upside. Gold has staged a healthy bounce while several small caps are showing early breakouts or bear trap recoveries.
Key levels to monitor this week:
- FTSE 100: 9,720 support, 9,830 target.
- DAX: 23,800 channel floor, 24,400 resistance for a positive reversal.
- Dow: stay above 47,000 for a run to 48,300.
- Bitcoin: close through 116 and RSI above 50 to change the consolidation picture.
- Ethereum: 3,750 support, 4,165 50-day resistance, downside to 3,380 if it breaks down.
More updates tomorrow as price action unfolds.
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.
