Overview

Renko Chart Trading

On November 5, the $SPX reached a new all-time high of 4,718 before retracing its steps and ending slightly below 4,700. When looking at the daily Renko chart, it was never able to close above the 4,700 mark. Currently, the all-time closing on the Renko daily chart is 4,692. In spite of the fact that the $SPX is comfortably trading in record territory and that the bullish momentum is strong, further highs are still highly possible based on Renko chart trading patterns and technical analysis.

As a matter of fact, the $SPX has gained more than 180 points since surpassing the 4,536 mark. The stock market, on the other hand, is currently retreating from its all-time high, owing to some profit-taking as a result of the magnitude of the previous surge. The $SPX is quite likely to rebound back up and retest the 4,700 level in the near future, despite the recent pullback. On the downside, the $SPX should find plenty of support between 4,572 and 4,536, as there are no obvious support levels above 4,572 on the daily chart.

Despite the recent downturn, our outlook for the short term on the $SPX remains intact. The previous all-time high for Renko was 4,536. A gain of one percent would take the index to around 4,580 points. On October 26, the $SPX closed at 4,574. If it climbed by just 2%, it would be nearing 4,626. On November 11, the $SPX closed at 4,630.

After a 4% increase from its previous close of 4,536, the $SPX would be at 4,717. After rising as high as 4,718 during the 11/5 trading session, the $SPX slid down somewhat, ending the day just around 4,700. The next target is 4,762, a 5% increase over the previous target. However, based only on chart patterns, we had predicted that the $SPX would retrace and consolidate before rising to 4,762 as a result of profit-taking.

Writing Covered Calls

Writing covered calls on equities that you own is a great strategy to provide downside protection for your portfolio of investments. Covered call writing can give you more income, increased safety, and a greater possibility of making a profit than other investment strategies. Writing out of the money calls is an excellent strategy to employ if you believe in and are confident in the underlying stock. In the event that you are not confident in the stock, writing calls at the money or in the money might be a solid strategy.

• The traditional 6-point brick size is used in the Renko chart.
• On the upside, the 4,700 region serves as an immediate psychological resistance level.
• On the downside, 4,572 is the first level of support, followed by 4,536, and subsequently 4,500.

How to Apply Renko Chart Trading Patterns and Technical Analysis in Trading – Support, Resistance, and Trendline

As indicated by the daily Renko chart pattern and technical analysis, the $SPX has been trading in record territory, exhibiting strong bullish momentum and an optimistic outlook despite the recent drop in the market. The $SPX’s next upward target might be around the 4,717 level, followed by the 4,762 level, which would be the second target. The biggest source of concern at the moment is that the $SPX has surged more than 180 points from the 4,536 level with no evidence of a correction. The drive to profit in the short term has grown stronger. Because of profit-taking pressure, the $SPX is expected to retrace and consolidate for a short period of time before restarting its upward trend.

Daily Renko Chart

While in the consolidation phase, the psychological barrier of 4,700 would most likely be the first obstacle that $SPX would have to overcome. Furthermore, the $SPX has gained more than 180 points since it crossed the 4,536 level. It is beneficial for the market to take a break. During this retreat, the 4,590 level provides the initial level of technical support, which is followed by the 4,554 and 4,536 levels, respectively. The difference between the daily and hourly charts is that on the daily chart, the first level of support is not visible until $SPX reaches the 4,572 region, but on the hourly chart, the first level of support is seen when $SPX reaches the 4,590 area.

Hourly Renko Chart

On the 5-minute chart, there are four distinct trading zones that may be detected. The first zone is located above the 4,632 area. Initially, the $SPX would most likely encounter resistance between the 4,680 and 4,700 levels, which is considered psychologically significant. The second trading range is between 4,596 and 4,632. If the $SPX goes below 4,632, the 4,600 level serves as a first line of technical and psychological support. The third trading zone is located between 4,554 and 4,596. This would only occur in the event of a significant decline.

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?