Renko Chart Trading
Today, the SP 500 $SPX had a chance to retest some resistance levels, including 4,380, 4404, and 4,422, but 4,404 proved to be a difficult resistance level to overcome on the first attempt. It couldn’t hold on to its gains and concluded the day below the 4,400 mark. According to Renko chart trading patterns and technical analysis, the ascending trendline running from 3270 to 3774 has been broken. For the bulls, this is awful news. As a result, starting a fresh long position now would be premature. A bottom must first be established before the market can move higher. It remains to be seen whether the 4,356 support level is confirmed as the bottom.
Because the long-term rising trend has been broken, the bulls face a difficult task ahead of them. The good news for bulls is that the 4,380 resistance level has been regained today. The barrier level of 4,404 becomes much more difficult to overcome above 4,380, as has been shown today. The attempt to reclaim the 4,404 region has fallen short. Furthermore, despite the fact that the long-term rising trendline has been broken, a short-term bottom has yet to be established. In this case, $SPX has unquestionably entered the correction phase. It’s unclear how much further the market can fall.
Because there are so many unknown elements at this moment, initiating a new long position should be approached with prudence. Writing covered calls on equities you own to provide downside protection is a realistic alternative for the time being. Writing covered calls in a downtrending market, on the other hand, could be a successful move. Right now, a cautious approach to investing is an appropriate strategy to deal with the market.
- The traditional 6-point brick size is used in the Renko chart.
- On the upside, the 4,404 region serves as an immediate resistance level, followed by the 4,422 resistance level.
- On the downside, 4,380 is the first level of support, followed by 4,356, and subsequently 4,326.
How to Apply Renko Chart Trading Patterns and Technical Analysis in Trading – Support, Resistance, and Trendline
According to the daily Renko chart pattern and technical analysis, the bulls have challenges because $SPX has broken below the important upward trendline. The market’s future trajectory is unclear as a result of the recent downturn. To begin with, it’s unclear whether 4,356 is a near-term bottom. Second, it closed today below 4,404, which proved to be a significant barrier. It’s crucial to keep the price above 4,380; else, it’ll most likely retest the previous low of 4,356. The next support level is 4,326 if 4,356 gives way. The bulls, on the other hand, will have a greater chance of pushing the price higher toward 4,500 if they can reclaim the 4,404 and then 4,422 zones.
Daily Renko Chart
On the hourly Renko chart, the $SPX is clearly below the prior key support levels of 4,404. It’s still locked between 4,356 and 4,404. As $SPX has broken through multiple major support levels and fallen below the long-term rising trendline, the bulls’ position has gotten more challenging. For the time being, the focus will be on 4,356, which should help to reverse the downward trend. To the upside, $SPX must first retake the 4,404 region, followed by the 4,422 region. If $SPX can close above these levels, the chances of a retest of the 4,450 to 4,480 resistance zone improve.
Hourly Renko Chart
On the 5-minute Renko chart, 4,356 appears to be a sturdy support level for the time being. It’s unclear whether 4,356 is the bottom. The next support zone is around 4,320 to 4,340 if the 4,356 level gives way. If the 4,320 level fails to stop the decline, it will fall below 4,300, which is not evident as a support level on the 5-minute chart. The bulls’ prospects appear gloomy on the 5-minute chart. On the plus side, in order to advance higher and retest the 4,450 zone, the 4,410 level must be reclaimed.