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, Ampeak, ACG Metals, Blencowe, Catenai, Capital Metals, GCM, Guardian Metals, Hydrogen Utopia, Metir, Seeing Machines, Strategic Minerals.
Here is a quick charting round up across major indices, crypto, gold and a selection of bulletin board stocks. I will run through the key technical levels I am watching and the near term targets I am considering.
As always, do your own research and treat these as chart-based observations rather than hard recommendations.
FTSE 100
The FTSE 100 is sitting on an uptrend line that dates back to last month. Friday’s low at 9,640 is a clear short term level that needs to hold if we are to push up towards the top of the rising trend channel from early June, which currently points up around 9,900.
“We could almost dare to dream of 10,000 by the end of the year if there’s a flip in sentiment.”
If the market slips decisively below 9,640 the next initial support is down at 9,574 for November. Given the sharp bounce we saw when old October resistance flipped to support, I am not expecting anything much lower than that at the moment.
DAX
The DAX remains under pressure. There is an extended top from May near 24,600 and the index has fallen below the 50 day moving average, around 23,959. I want to see an end of day close back above that 50 day to reduce the risk of a test of the 200 day moving average at about 23,400.
Below the 200 day things get more uncomfortable; a more severe breakdown could push the DAX towards the 22,500 zone. Prior to the breakdown we had a sequence of RSI 50 failures which foretold the weakness. Key near term resistance to watch is the September support area around 23,200 while under the 50 day and beneath 24,000.
Dow
The Dow has managed to bounce above its 50 day moving average and importantly has stayed above neutral 50 in the RSI on the recent dip from the highs near 48,000. That is a constructive sign.
I cannot rule out another test of the 50 day similar to the tests we saw last month and in August. While we remain below Thursday resistance at 47,300 there is still a chance of revisiting the 50 day. My target is the top of the May 2024 rising trend channel, around 48,300 by the end of next month.
Bitcoin
Bitcoin continues to look fragile. The chart reads like a bear flag with resistance at the old October support near 104,000. A break below 104,000 opens up the June support around 98,000 and the May support near 93,000. Given the RSI and the structure, a move down into that range is the more likely scenario for now.
Ethereum
Ethereum has been worse than Bitcoin in recent weeks and is mirroring the vulnerable structure. The old October support near 3,570 is critical. A failure below that level risks a move down toward July support around 2,920. That would be disappointing after highs around 4,800 in August and 4,600 last month.
Gold
Gold looks like it is in a negative consolidation. I expect at least a probe of the 50 day moving average, which sits around 3,868, while the market remains under recent resistance near 4,050. On the upside the best immediate resistance I see is around 4,170, which was a turn point on the way down. The RSI sitting just under neutral 50 also supports the idea of a touch of the 50 day.
Stocks to Watch
Overall there is less breadth for exciting bullish setups, but a few names are standing out on the bulletin board. I am summarising the charts and my near term targets below.
- Ampe Energy – The shares have rebounded above a rising 50 day and a rising 200 day. RSI sits well above neutral 60. Recent resistance around 2.5 pence has been cleared. Initial target is the top of the rising trend channel near 4 pence, possibly by the end of this month.
- ACG Metals – Despite softer gold prices the shares have bounced and track a rising trend channel from April. The top of that channel points toward £14 as a year end target while remaining above the channel floor near £10.60 . The recent RSI 50 rebound and a gap up are positive signals.
- Blencowe – The chart is constructive while above 6 pence. An initial target of 8 pence has been met and the line from 2020 suggests a best case up near 11 pence, possibly into January if momentum continues.
- Katana – The company appears to be benefitting from attention around the web summit. We have retested a first target around 0.54 pence and above that the upper parallel of the rising trend channel is currently around 0.9 pence. While recent broken resistance at about 47 pence holds, there is a punchy upside case in a one to two month view.
- Capital Metals – This one looks strong. It has broken out of a rising trend channel; above the red line at 5.2 pence I am looking for 7 pence as soon as the end of this month or even sooner. Momentum suggests there could be more.
- GCM – The share price has bounced above a rising 200 day at about 4.05 pence. Initial targets include the floor of the channel near 4.5 pence and the 50 day at about 6.22 pence in the coming days.
- Guardian Metal – A bounce above the rising 50 day and a break of neckline resistance around 115 pence has set up a retest of 100 pence plus by the end of this month.
- Hydrogen Utopia – The U shares have broken recent resistance at 2.1 pence. The initial target is around 2.7 pence, a one year resistance line in November. Best case into the end of this month is up to about 4 pence, which is the top of a triangle formed earlier in the year.
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Metir – Following news earlier in the week the shares sit in a rising trend channel. An initial target is 2.98 pence in the coming days and a best case into year end up to 14 pence, essentially retesting September resistance.
- Seeing Machines – There has been a bull flag breakout above roughly 3.7 pence. Looking for the top of the range and the channel from January near 4.75 pence by the end of this month.
- Strategic Minerals – This one has been persistent. The rising trend channel since the end of September points to a top near 2.75 pence by year end while remaining above the channel floor around 1.6 pence.
Conclusions
Markets are mixed. The FTSE is holding a rising trend but needs to keep above 9,640 to maintain the upside. The DAX is fragile beneath its 50 day and could test lower moving averages. The Dow remains constructive while above key moving averages. Bitcoin and Ethereum look vulnerable, with bear flag structures and downside risk to earlier support zones. Gold may test its 50 day before meaningful direction is decided.
On the smaller stocks there are a handful of strong chart setups to watch. Capital Metals, Ampe Energy and a few others stand out for near term upside if momentum continues. I will be watching the levels outlined above and will post more updates during the week.
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.
