Renko Chart Trading
The $SPX reached fresh highs before retracing slightly and closing in the red. The all-time high, which was established during the day before the market reversed, stands at approximately 4,598. The all-time close on the Renko daily chart is 4,572. Because the $SPX is comfortably sitting in record territory and the bullish momentum is robust, higher highs are expected based on Renko chart trading patterns and technical analysis. However, because the recent gain was so large, $SPX may retrace from the all-time high, resulting in some profit taking. On the downside, the index might find ample support between the 4,536 and 4,500 zone if it retraced and recovered its bullish momentum.
While bullish momentum is currently extremely strong, certain prospective near-term highs are plainly seen. The following expectations remain unchanged. The previous all-time high for Renko was 4,536. A 1% increase would push the index to roughly 4,580 points. On October 26, the $SPX closed at 4,574. If it climbed by 2%, it would be approaching 4,626. Between the two expected values is a psychological barrier of 4,600. Yesterday, the $SPX reached 4,598 before retracing. The initial level of support, on the other hand, is 4,536, with psychological support at 4,500. Further down, the zone around 4,476 should provide excellent support.
Writing Covered Calls
To give downside protection, it’s a good idea to write covered calls on stocks you hold. Income, safety, and a higher possibility of profit are all potential benefits of covered call writing. If you believe in the stock and are confident in it, writing out of the money calls is a great strategy to deploy. Writing at the money or in the money calls can be a decent option if you’re not sure about the stock.
If the market or stock loses momentum or continues to bounce around in a trading range with no discernible direction, writing out of money calls may provide downside protection. Profitable chances arise as the market continues to climb.
As the stockholder continues to reduce the cost basis, the chances of making a profit improve. The cost basis of a stock decreases considerably when you write covered calls on it for a long time, increasing your chances of earning.
- The traditional 6-point brick size is used in the Renko chart.
- On the upside, the 4,600 region serves as an immediate psychological resistance level.
- On the downside, 4,500 is the first level of support, followed by 4,476, and subsequently 4,422.
How to Apply Renko Chart Trading Patterns and Technical Analysis in Trading – Support, Resistance, and Trendline
The $SPX is trading in record territory, according to the daily Renko chart pattern and technical analysis, with strong bullish momentum and a favorable outlook. Between the 1% increase from the previous record close at 4,536 near 4,580 and the psychological level of 4,600, $SPX’s next upward target is highlighted. With a 2% increase, the index should rise to 4,620 points. The initial level of support, on the other hand, is 4,536, followed by the area about 4,500.
Daily Renko Chart
The $SPX is nearing an all-time high right now. More new highs are extremely likely because there is no clear barrier to the upside except the most recent record high near 4,600. $SPX’s initial hurdle would most likely be the psychological barrier of 4,600. Furthermore, the $SPX has risen more than 200 points since the 4,340 area. It is feasible to take a break. If a pullback occurs, the 4,536 level provides the first level of technical and psychological support, followed by the 4,476 level.
Hourly Renko Chart
Except for the recent high of 4,596, there is no obvious barrier to the upward trend on the 5-minute Renko chart; more new highs as well as a retreat are likely. The 5-minute chart can be divided into three trading zones. The first zone is located above the 4,536 area. With two trading days left in October, the psychological barrier of 4,600 would most likely be the $SPX’s objective. Furthermore, since the 4,340 area, the $SPX has gained more than 200 points. There will almost probably be a retreat. The second trading range is between 4,500 and 4,540. If there is a downturn, the 4,500 level is the first level of both technical and psychological support. The third trade zone is between 4,440 and 4,480.