Renko Chart Trading
After temporarily dipping below the 4,300 psychological barrier, the S&P 500 $SPX sought to retest the 4,356 and 4,380 resistance levels today. $SPX didn’t quite make it to the 4,260 support mark. It did, however, find some support in the 4,288 area. It was unable to surge above 4,380 and ended the day at 4,356. The ascending trendline extending from 3270 to 3774 has been broken, indicating that $SPX is currently in the corrective phase, according to Renko chart trading patterns and technical analysis. As a result, starting a new long position now would be a bad idea. Before $SPX can move higher, it must first find a bottom. It’s still unclear whether the downward trend has reached a bottom.
Breaking beyond the 4,380 barrier will be much more difficult in the near future, as today’s attempt failed. As the market continues to sort out its direction, a short-term bottom has yet to form. Things aren’t looking good for the bulls. As $SPX has lost more than 200 points from its 4,500 level, today’s rebound appears to be a natural dead cat bounce. As the downward trend persisted, today’s low, 4,288, may or may not be the bottom. $SPX could retest the 4,288 level or drop further to the 4,260 level.
Writing Covered Calls
Taking a new long position should be done with caution right now because there are so many unknown variables. For the time being, if you haven’t taken profits on your long positions, writing covered calls on stocks you own to provide downside protection is a reasonable choice. Writing covered calls, on the other hand, might be a successful strategy in a downtrending market. For now, the best way to deal with the market is to take a conservative approach to investing.
- The traditional 6-point brick size is used in the Renko chart.
- On the upside, the 4,380 region serves as an immediate resistance level, followed by the 4,404 resistance level.
- On the downside, 4,320 is the first level of support, followed by 4,260, and subsequently 4,230.
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 encounter challenges because $SPX does not have a clear trend at the time. Despite today’s gains, the market’s future trajectory is still unclear. First and foremost, it’s unclear whether the market has found a near-term bottom. Second, it closed today below 4,380, which proved to be a major roadblock. If the $SPX can retest the 4,380 level and gain ground, the near-term outlook may appear a little brighter. If the decline continues, the market will almost surely drop below 4,300 and retest the prior low of 4,260.
Daily Renko Chart
On the hourly Renko chart, the $SPX is clearly below the prior significant support levels of 4,380. The bulls’ plight has worsened as the $SPX has broken through several key support levels and fallen below the long-term rising trendline. For the time being, the focus will be on 4,356, which provides much-needed support to bulls. The fall will continue if 4,356 does not hold. Below 4,356, the initial support level is at 4,320, followed by the prior low of 4,260. To the upside, $SPX must first retake the 4,380 level, followed by the 4,398–4,404 range. $SPX will have a greater chance of retesting the 4,422 to 4,450 resistance zone if it can close above 4,404.
Hourly Renko Chart
On the 5-minute Renko chart, 4,356 appears to be a strong support level, and it is being retested once more. Clearly, the market is still hunting for a bottom. It’s unclear whether the 4,356 support level will be enough to halt the downward trend. If the 4,356 barrier is broken, the price will first fall to 4,320. If this does not stop, the price will drop below 4,300, with 4,260 serving as the next level of support. The bulls’ prospects appear to be grim on the 5-minute chart. To advance higher and retest the 4,404 zone, the 4,380 level must be reclaimed on the upside.