How To Trade Using Renko Chart with Comprehensive Analysis


September 3, 2021

In today’s article, we’ll delve further into SP 500 Renko charts and Renko chart trading techniques. Renko charts across many timeframes will also be analyzed from a technical perspective.

Renko Chart Trading

The SP 500 FUTURES kept climbing higher. 4,549 is the all-time high. According to Renko chart trading patterns and technical analysis, the SP 500’s bullish trend is still very much intact. The ascending trendline is approaching the 4,390 mark. The index is currently trading more than 150 points above this rising trendline, showing that the upward trend is still strong. The price change on Friday reflected mixed emotions in the aftermath of a disappointing US jobs report, which raised concerns about the pace of economic recovery while weakening the case for Federal Reserve tapering in the near term.

On the upside, there isn’t much of a barrier in sight because the price has risen to new highs. Higher highs are likely if the price breaks through 4,549. On the downside, there is a lot of support on the way. The previous high of 4,470 acts as the first level of support, with 4,410 and 4,374 following closely behind.

For more information on the technical analysis of Renko charts, please see this post, which contains more in-depth examples of the techniques.

Covered Call Strategy

Investors should be aware that entering a new long position at this time should be done with caution. For the time being, writing covered calls on the stocks you own to give downside protection is a viable option.

For more information on how to use the covered call strategy to generate additional income for your portfolio, see this post. It goes into greater detail about the techniques that were employed in this strategy. It is possible to have covered calls that are either in the money (ITM), at the money (ATM), or out of the money (OTM). The post explains when and how to do so in great detail.

  • The traditional 6-point brick size is used in the Renko chart.
  • On the upside, the recent record high of 4,549 serves as a small barrier.
  • The previous high of 4,470 is the first line of support on the downside, followed by 4,410 and finally 4,374.

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

The major trend is upward, according to the daily Renko chart pattern and technical analysis. A break above 4,549 indicates that the current uptrend will continue. As the ascending trendline approaches 4,390, a break below it will likely break the rising trendline and shift the primary trend to the negative. The upward resistance is insignificant. A breach of 4,549 will send the price rising. The first significant defense, on the other hand, is 4,470. If the futures retest this level and are able to rebound from it, the rising trend will not be jeopardized.

Daily Renko Chart

SP 500 Renko Chart Trading and Technical Analysis 9/3/21 daily chart

We can plainly observe on the hourly chart that the price is now slightly above the yellow zone between 4,518 and 4,536. The W, double bottom, created in the yellow region, might offer the SP Futures with the strong support needed to sprint higher. A break below the W support line, 4,518, will almost certainly halt the bullish trend. The previous high of 4,494 may offer some support. If this level of support does not hold, the next level of support is 4,470.

Hourly Renko Chart

SP 500 Renko Chart Trading and Technical Analysis 9/3/21 hourly chart

The 5-minute chart looks similar to the hourly chart. The yellow region between 4,518 and 4,536 is important. If the price can break out of this range and rise above 4,549, the positive momentum will continue, and new highs will be achieved. However, if the price falls below the bottom of the yellow region, 4,518, the powerful bullish momentum may be stifled. A break below 4,518 will very certainly result in a retest of 4,494 or 4,470.

5-Minute Renko Chart

SP 500 Renko Chart Trading and Technical Analysis 9/3/21 5-minute chart

Renko Chart Trading: More Resources

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