Renko Chart Technical Analysis
SP 500 FUTURES traded below the strong resistance level, 4176, during the overnight sessions. Shortly after the U.S. open, the bulls pushed it higher. It firmly stood above 4176 and then raced toward the next resistance level, 4200. It closed slightly below 4200; however, there is a very good chance for the bulls to continue the strong upward momentum tomorrow. 4230 is within reach once again. Based on the Renko chart technical analysis,
- The Renko chart uses a traditional 6-point brick size.
- On the upside, 4200 is the immediate resistance zone.
- If the SP 500 Futures breaks above 4200 and holds, 4200 becomes the support level. The next resistance is 4230.
- On the downside, 4176 / 4164 is the strong support zone.
- Psychological barriers: 4100 / 4200
It was an up and up trading day on Monday. The strong resistance, 4176, was finally broken. The SP 500 Futures did test the 4200 resistance level, but it closed slightly below 4200 in the end.
- On the upside, 4200 is the immediate resistance zone for the SP 500 FUTURES. The next resistance level will be 4230.
- On the downside, 4176 is the first support area, followed by 4128.
Below is the daily Renko chart
How to Use Renko Chart Technical Analysis in Trading – Use Support, Resistance, and Trendline
A Renko chart provides a way to see the price movements easily and concisely. It filters out the minor price movements because a Renko brick requires a predetermined amount of movement. They also eliminate the time element. Unlike the bar or candlestick charts, there is no Renko brick drawn on the chart when the price has not moved up or down at least the predetermined amount within a given timeframe. Since the noises are removed from a Renko chart, it is easier to identify a trend, support or resistance on the chart.
In today’s Renko chart, the SP 500 Futures simply continued its uptrend from 4152. The first resistance level was 4176, which did take some time to break; however, it was not visible on a Renko chart. We knew 4176 was hard to break because 4176 / 4164 have been the support and resistance area many times. In order for the SP 500 FUTURES to move higher, 4176 had to be broken. Today was the day. Now, 4164 / 4176 has become the strong support zone. The next target would be 4200 and 4230.