Renko Chart Trading
$SPX retested the support level near 4,320 after 4,300 offered much-needed support, and it was able to regain its footing and reverse upwards. The closing above the main support level of 4,356 confirmed the formation of a short-term bottom. The Bulls appear to have the upper hand at the moment. After breaking through a key barrier near 4,400, $SPX is currently approaching another major obstacle near 4,476. If $SPX can close firmly above 4,476, the chances of breaking above 4,500 are considerably increased, according to Renko chart trading patterns and technical analysis. $SPX may return to 4,404 and retest the support level if 4,476 is difficult to concur the first time.
The $SPX broke over the significant barrier of 4,404 and surged above the falling trendline, which is highly promising for bulls. Because the $SPX finished just below 4,476, it is now trading in a range of 4,404 to 4,476. $SPX will be able to attack the barrier near 4,500 if 4,476 is taken out. The 4,404 level, on the other hand, is considered the near-term support level. It’s probable that $SPX may fall and retest 4,404 before pushing higher.
Writing Covered Calls
It’s a smart idea to write covered calls on equities you own to provide downside protection. When a stock is in a correction period, its price tends to fluctuate up and down. Writing covered calls could be a wise move if the direction isn’t evident. If you are optimistic about the stock, writing out of the money calls is a wonderful technique . Writing at the money or in the money calls, on the other hand, could be a decent choice if you aren’t completely optimistic about the stock.
- The traditional 6-point brick size is used in the Renko chart.
- On the upside, the 4,476 region serves as an immediate resistance level, followed by the 4,500 resistance level.
- On the downside, 4,404 is the first level of support, followed by 4,380, and subsequently 4,356.
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, $SPX broke above the downtrend resistance line and recaptured the 4,404 level. For the time being, we believe the downtrend correction has been maintained but is now weakening. To begin with, the $SPX is still trading below the record close of 4,536, indicating that it is not yet out of the woods. Second, it failed to close above 4,476, indicating that the market continues to have headwinds. As the market continues to test the resistance levels that lie ahead, investors should exercise caution.
Daily Renko Chart
On the hourly Renko chart, the $SPX is currently slightly below the 4,476 resistance level, but it is still above the declining trendline and above the prior significant resistance level of 4,404. It will be quite encouraging for bulls if $SPX can close firmly above 4,476 soon. For the time being, $SPX is trading in a band of 4,404 to 4,476. If $SPX falls below the 4,476 level, there is a little support near 4,446, which may provide some support. After 4,476 is cleared, the next obstacle is in the 4,500 to 4,520 range.
Hourly Renko Chart
On the 5-minute Renko chart, $SPX has overcome previous resistance levels of 4,404 and 4,440. For $SPX, these levels have now become support levels. The market came close to reaching the 4,476 level on Friday. The 4,356 level appears to be a firm bottom on the 5-minute Renko chart. $SPX formed a reverse head and shoulders pattern between 4,280 and 4,356, confirming the solid support. Bulls have a good chance of pushing the $SPX above 4,476 and closing above it.
5-Minute Renko Chart
Renko Chart Trading: More Resources
- How Do Renko Charts Work? A Trader’s Guide
- How to Use Renko Charts for Stock Trading?
- Renko Chart Buy Sell Signals – a How-to Guide
- What Is a Renko Chart and How I Use It in Trading
- Buy-Write Covered Calls Strategy Should Generate More Income
- What Is a W Double Bottom Pattern and How to Profit from It?