Overview
Today’s post will cover the current SP 500 forecast, technical analysis of SP 500 Renko charts, the covered call strategy and major support and resistance levels across multiple timeframes.
SP 500 Forecast and Charts
On January 1, 2022, the most recent forecast for the S & P 500 index was completed. You can find the specifics, as well as previous forecasts, on this page.
SP 500 Forecast and Renko Charts Technical Analysis
After rising above 4,800 during the previous trading sessions, the SP 500 was never able to close above that level. Since January 4, 2022, it has been on a downward trajectory. SP 500 has reached a critical juncture where 4,650 can slow or stop the bleeding. Although it is possible to argue that there is more support below 4,600.
On the downside, if the level of support at 4,650 is insufficient to halt the decline, the next level of support is between 4,580 and 4,600. Additional support comes in at around 4,530 to 4,550 on the downside, which is the next level of support.
- The traditional 6-point brick size is used in the Renko chart.
- On the upside, the 4,700 region serves as an immediate resistance level, followed by 4,750.
- On the downside, 4,650 is the first level of support, followed by 4,580, and subsequently 4,530.
Writing Covered Calls
When markets are in a variety of states of flux, covered call writing can be extremely beneficial. It is an excellent method of protecting the equities in your portfolio from losses. You can make money by writing covered calls because they can lower the cost basis of your investment, which increases your chances of making money when you sell them. Writing out-of-the-money calls can be a profitable strategy if you have a high level of confidence in the underlying stock you are trading. If you are uncertain about the performance of a stock in the future, it is possible to make money by selling calls at or near the strike price of the stock.
In a downtrending market, it is important to remember that calls that are in the money provide significantly more protection than calls that are out of the money. More information on how to incorporate covered call strategies into your investment portfolio can be found in this post, which discusses in-the-money (ITM) covered calls, at-the-money covered calls, and out-of-the-money (OTM) covered calls in a variety of market environments in detail.
Renko Charts Technical Analysis
Daily Renko Chart and SP 500 Forecast
Once again, a stunning reversal to the downside occurred, this time at 4,796, propelling the SP 500 to a new low of 4,580 today on the downside. The S&P 500 index reversed course near 4,580 and then soared 90 points to close at 4,670, according to the daily Renko chart. This is good news for bulls because the short-term bottom appears to be located near 4,580. To begin with, 4,700 represents the first upward barrier, which is then followed by 4,750.
When looking at the downside, 4,650 represents the first level of support, which is followed by 4,580.
5-Minute Renko Chart
When looking at the 5-minute chart, it is clear that buyers entered the market late in the day and pushed the index up from 4,580 to 4,670. It is also clear that the SP 500 is not moving in any discernible direction. It is, in fact, moving sideways.
On the upside, 4,700 is the first barrier to overcome, followed by the obstacles near 4,800.
On the downside, there are several levels of support located below the 4,600 level. If the SP 500 is unable to halt its decline at 4,650, it is likely to retest the levels of 4,600 and 4,580.
