SP 500 Renko Chart Trading and Technical Analysis 10/05/21

Overview

Renko Chart Trading

For the time being, 4,300 provided much-needed support for $SPX, which was able to rally from there. It gained 70 points today before settling at 4,345 at the close. $SPX was forced down below the other resistance level of 4,356 after failing to get near to the resistance level of 4,380. This could be concerning. The $SPX is still correcting downward, according to Renko chart trading patterns and technical analysis, in order to find a sturdy support level that will attract buyers. As a result, taking on a new long position now would be a bad idea. Before $SPX can move higher, it must first find a bottom. The downward trend does not appear to be reversing.

The $SPX has held below the crucial support levels of 4,380 and 4,356, respectively. The declining trend was unchanged. Shorts may take profits, while speculators may seek to buy stocks in order to profit from the small, quick gains that occur between dips. As the market continues to figure out its path, a short-term bottom has yet to develop. Things aren’t looking good for the bulls. The low of 4,278, set on Monday, may not be the bottom as long as the downtrend continues. The $SPX may go below 4,260 or retest the 4,278 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 prudent choice. Writing covered calls, on the other hand, could be a successful move in a downtrending market. For the time being, the safest approach to the market is to invest cautiously or to remain on the sidelines.

  • The traditional 6-point brick size is used in the Renko chart.
  • On the upside, the 4,356 region serves as an immediate resistance level, followed by the 4,380 resistance level.
  • On the downside, 4,320 is the first level of support, followed by 4,300, and subsequently 4,260.

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 face challenges because today’s rebound was not noteworthy. The two significant resistance levels, 4,356 and 4,380, were not reclaimed by the $SPX. Perhaps it requires a second try. For the time being, we must presume that the downtrend correction has persisted. First, whether the market has struck a short-term bottom is debatable. Second, it failed to close above 4,356, showing that the market remains jittery. Perhaps a better alternative is for the $SPX to test and rebound from the 4,260 level, which would make the near-term outlook a little brighter. The market will almost probably fall to 4,200 if the bearish trend continues and 4,260 gives way.

Daily Renko Chart

SP 500 Renko Chart Trading and Technical Analysis 10/05/21 daily chart

On the hourly Renko chart, the $SPX is still below the previous critical support levels of 4,380 and 4,356. It would have been more encouraging for bulls if $SPX could have closed firmly above 4,380. Unfortunately, this is not the case at all. The bulls’ situation has gotten worse as the $SPX has broken through many important support levels. For the time being, the focus is on 4,260, which provides much-needed support to bulls in order to keep the market from falling further. The fall will continue if 4,260 does not hold. Below 4,260, the first support level is at 4,230, followed by the prior low of 4,200. $SPX needs to retake the 4,356–4,380 range on the upside.

Hourly Renko Chart

SP 500 Renko Chart Trading and Technical Analysis 10/05/21 hourly chart

On the 5-minute Renko chart, major resistance levels of 4,356 and 4,380 continue to push the $SPX down. The market attempted, but failed, to reclaim these levels. We must presume that today’s activity was a natural rebound following a long period of decline. Clearly, the market is still hunting for a bottom. The downward trend has not changed. It’s unclear whether the 4,260 level of support will be enough to keep the declining trend from continuing. The price will initially fall to 4,230 if it falls below 4,260. If the current trend continues, the price will drop to 4,200. The bulls must hold the 4,320 level on the 5-minute chart, and the 4,356 and 4,380 levels must be retaken on the upside to continue higher.

5-Minute Renko Chart

SP 500 Renko Chart Trading and Technical Analysis 10/05/21 5-minute chart

Renko Chart Trading: More Resources

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