Renko Chart Trading
After 4,300 provided much-needed support for $SPX and 4,356 was regained, bulls appear to have the upper hand presently. For the time being, the battleground is located between 4,380 and 4,420. $SPX was unable to close above 4,404, making it appear difficult to overcome. According to Renko chart trading patterns and technical analysis, the $SPX will continue to drop downward unless it can close firmly above 4,404. As a result, adding a new long position at this time would be a bad idea. It is preferable to remain on the sidelines until a reversal is proven.
The $SPX has managed to stay below the key resistance level of 4,404. The downward trend was unchanged. Although the bulls are cheered by the fact that the $SPX has reclaimed the 4,356 mark, it remains to be seen whether the trend has reversed. The $SPX is being pushed below the 4,404 level by the descending trendline, which is also an important resistance level for bulls to overcome.
Writing Covered Calls
Because there are so many unknown variables right now, taking a new long position should be done with discretion. Writing covered calls on stocks you own to give downside protection is a good choice for the time being if you haven’t taken profits on your long positions. In a downtrending market, writing covered calls could be a smart move. For the time being, the safest strategy for the market is to invest cautiously or stay out.
- 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 4,420 resistance level.
- On the downside, 4,356 is the first level of support, followed by 4,320, and subsequently 4,300.
How to Apply Renko Chart Trading Patterns and Technical Analysis in Trading – Support, Resistance, and Trendline
The key resistance level, 4,404, was not reclaimed by the $SPX, according to the daily Renko chart pattern and technical analysis. We must assume that the downtrend correction has continued for the time being. First, it’s debatable whether the market has reached a short-term bottom near 4,300, since the $SPX has remained below the descending trendline. Second, it failed to close above 4,404, indicating that the market is still skeptical of recent gains. For the time being, the greatest investment plan is to wait and see.
Daily Renko Chart
The $SPX is above the prior important support levels of 4,380 and 4,356 on the hourly Renko chart, but it remains below the declining trendline. If $SPX had finished firmly over 4,400, it would have been more positive for bulls. For the time being, the focus is around 4,400 and the declining trendline, which bulls must break through to break out of the downtrend. Otherwise, the decline will continue, with the price returning to 4,356 or possibly 4,300.
Hourly Renko Chart
The previous resistance levels of 4,356 and 4,380 on the 5-minute Renko chart have now become support levels for $SPX. The market made an unsuccessful attempt to retake the levels above 4,400. On the 5-minute Renko chart, the 4,300 level appears to be a strong bottom. Bulls may have a good chance of pushing $SPX higher and closing above the 4,400 mark if it revisits and recovers from the 4,356 range. After that, $SPX may be able to break out of its present slump.