Renko Chart Trading
Since Monday, the SP 500 FUTURES has been zigzagging between 4,370 and 4,422. The lowest point was 4,365. The level of support at 4,370 has proven to be solid. It closed at an all-time high today, despite being only a quarter point higher than the previous record high. The daily Renko chart trading pattern continues to indicate a favorable trend that has now stagnated. This wait-and-see attitude might persist until tomorrow’s July employment data. Following the report, we should be able to see where the market is heading.
The SP 500’s bullish trend is continuing, according to Renko chart trading patterns and technical analysis. The rising trendline is approaching the 4,300 level. I’m cautious about declaring today’s record closing a decisive breach above the consolidation zone. Despite the fact that the bulls definitely have the upper hand, again, I believe investors should use caution at this time. Starting a new long position now should be done with discretion. Writing covered calls on the equities you own to give downside protection is a viable option right now.
- The traditional 6-point brick size is used in the Renko chart.
- The next resistance is the all-time high of 4,422, which was reached exactly on the dot.
- On the down side, 4,380 is the first line of defense, followed by 4,344.
How to Apply Renko Chart Trading Patterns and Technical Analysis in Trading – Support, Resistance, and Trendline
As mentioned in Monday’s analysis, the all-time high of 4,422 appeared to be a big barrier at the moment, and futures was highly likely to fall lower toward the 4,350 area and retest the support level at 4,344. It did fall to a low of 4,365 and then recovered. The momentum has been quite positive. Higher highs are expected. It is, however, more necessary to pick intelligently in order to invest in the right stocks or funds. If you have earned a significant profit, writing covered calls at this stage may be a smart choice in case the market unexpectedly reverses.
Daily Renko Chart
The consolidation pattern between 4,370 and 4,422 is still visible on the hourly chart. Although the index rose somewhat, the gain was insignificant. The employment data due tomorrow might be the catalyst for the index to break out of its consolidation zone. Otherwise, the consolidation trend might continue. 4,370 is a solid support level, followed by 4,350 and 4,344.
Hourly Renko Chart
A consolidation pattern can also be seen on the 5-minute Renko chart, which is located between 4,370 and 4,422. The zigzag pattern will persist until the index makes a clean break away from the current trading area. There is no obvious barrier after 4,422. On the downside, 4,370 serves as a good support level for the first line of defense. On the down side, we have 4,350 or 4,344 as our second line of defense.