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<\/p>\nZak Mir takes a charting look at some of the most closely followed small caps on the London Stock Exchange. Today\u2019s charts are FTSE 100, DAX, Dow, Bitcoin, Ethereum, Gold, \u00a0Ascent Resources, Bradda, Chesterfield, Contango, Eurasia, Eco Buildings, Hama, Immupharma, ICFG, Red Rock, Zenith.<\/p>\n
In this update, I walk through the charts and setups I\u2019m watching across major indices, cryptocurrencies, gold and a selection of small-cap stocks. Below, I\u2019ll summarise the key levels, what I\u2019d like to see next, and the realistic downside risks to be mindful of.<\/p>\n
As always, do your own research and treat these as chart-based observations rather than hard recommendations.<\/p>\n
Quick market pulse<\/p>\n
FTSE 100<\/p>\n
The FTSE remains inside the rising trend channel that\u2019s been in place since June. We\u2019d hoped for a fresh leg higher earlier in the month, but instead the index came down to test the lower floor of that channel\u2014around 9,275\u2014and the 50\u2011day line (9,282).<\/p>\n
What I want to see next is a quick move back above the recent broken support zone (around 9,390 on an end\u2011of\u2011day close). If that happens early next week then a run toward an end\u2011of\u2011November target as high as 9,670 is entirely feasible. If we fail to reclaim that 9,390 area, the more complicated path opens up with a risk of testing mid\u2011September support near 9,200. At this stage I\u2019m not expecting anything worse than that; ideally the channel floor holds.<\/p>\n
DAX<\/p>\n
The DAX bounced off a long\u2011term April support line and is actually sitting a touch above it. The concern is the 50\u2011day moving average is falling and the RSI has dipped below neutral (43), which points to the possibility of a deeper test.<\/p>\n
We may need to see a re\u2011test of August\/September support near the 23,200 area and possibly the 200\u2011day line just under that (\u224823,100) before a proper recovery. The fact the DAX topped out close to record highs (24,600) makes this a delicate spot \u2014 an end\u2011of\u2011day close back above 24,000 and a snap\u2011back through the 50\u2011day would alleviate the negative picture.<\/p>\n
Dow Jones<\/p>\n
The Dow has held up reasonably well, wrestling with its 50\u2011day moving average (around 45,725). There\u2019s a band of resistance from the start of October near 46,200 that needs to be cleared to set up a move toward the top of the broader rising channel that\u2019s been guiding the market since May last year.<\/p>\n
Encouragingly we\u2019ve seen an RSI rebound around 50 and a bounce above the rising 50\u2011day line since Wednesday, which is a constructive look for a potential recovery.<\/p>\n
Bitcoin and Cryptocurrencies<\/p>\n
Bitcoin has been through a rough patch \u2014 we\u2019ve broken the floor of the rising channel and lost the 200\u2011day moving average (the 200\u2011day was just above current levels, roughly 107,300 in my notes). Below that there\u2019s a real risk of a move down to the ~98,000 area, which would be an unpleasant development for the crypto complex.<\/p>\n
Best case now is a return above the 200\u2011day moving average; the key downside level to avoid is 98,000. There\u2019s a possibility the market is trading in a wider sideways channel, but anything beneath that would be a problem given the 50\u2011day is beginning to tilt lower and the RSI weakness.<\/p>\n
Ethereum<\/p>\n
Ethereum has had more hopes attached to it and remains above its 200\u2011day moving average (3,177), which is a positive. There\u2019s an uptrend line from April that roughly coincides with Thursday\u2019s support (around 3,680). If it holds above that uptrend, a recovery back toward the 4,500+ area by month\u2011end is still possible, though the RSI\u2019s dip below 50 is a cautionary note.<\/p>\n
Gold<\/p>\n
Gold had an impressive run and hit my 4,200 target; there was an even better case target at 4,500 that may have to wait. For now I\u2019d like to see the market stay above the 4,070 area \u2014 that initial October resistance \u2014 otherwise the momentum looks a little tired after such a strong move.<\/p>\n
Small\u2011cap stocks<\/p>\n
Below are the names I\u2019m watching closely, why they matter and the targets\/levels I\u2019m tracking. These are chart\u2011based observations \u2014 keep position sizing and risk management front of mind.<\/p>\n
Key themes and risk management<\/p>\n
There are a few recurring themes in the charts this weekend:<\/p>\n
Many indices and small caps are testing moving averages (50\u2011day and 200\u2011day). Holds and reclaims of those lines would be constructive; failures increase the risk of deeper retracement.
\nRSI behaviour around the 50 level is proving informative \u2014 rebounds through 50 tend to confirm momentum shifts; slips below 50 warn of further testing lower.
\nGap reversals, bear\u2011trap setups and sideways shuffles above rising 50\u2011day lines are the patterns that have delivered some of the best follow\u2011through moves in these small caps.<\/p>\n
Conclusion<\/p>\n
We\u2019re at a make\u2011or\u2011break stage in a number of markets. FTSE and DAX need to reclaim key levels to keep the higher\u2011timeframe uptrends intact. Bitcoin\u2019s ability to get back above the 200\u2011day is crucial to avoid deeper downside. On the small\u2011cap front there are several names showing constructive footprints \u2014 Ascent, Bradda, Chesterfield, Eco Buildings and a few others \u2014 but these setups require discipline and clear end\u2011of\u2011day confirmations.<\/p>\n
\u201c\u201dIdeally we get back above recent broken support quickly \u2014 otherwise the path becomes more complicated.\u201d\u201d<\/p>\n
That\u2019s it for today \u2014 I\u2019ll post more updates tomorrow as the charts evolve. Trade carefully and keep risk management front and centre.<\/p>\n
Disclaimer & Declaration of Interest:<\/p>\n
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.<\/p>\n
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