Pivot Point

The Pivot Point indicator gives daily pivot point resistance level and support levels. It is displayed as a moving average of the stock closing price and upper / lower bands which represent the resistance and support levels on the stock price chart.

Pivot Point

The Pivot Point indicator gives daily pivot point resistance level and support levels. The Pivot Point is displayed as a moving average of the stock closing price and upper / lower bands which represent the resistance and support levels on the stock price chart.

 


Pivot Point Calculation

The pivot point is the average of today's close, the highest high and the lowest low during the previous n periods. Resistance is two times today's pivot point minus the lowest low during the previous n periods.

Support is two times today's pivot point minus the highest high during the previous n periods.   The Pivot Point indicator requires one parameter which is the number of periods over which the highest high and lowest low is calculated.

Avg Close = SMA(Close, n)

Avg High = SMA(High, n)

Avg Low = SMA(Low, n)

Pivot Point = (Avg Close + Avg High + Avg Low) / 3

Support = 2*Pivot Point - Highest(High, n)

Resistance = 2*Pivot Point - Lowest(Low, n)

where:

  • SMA( ) is Simple Moving Average over last n bars
  • Avg Close is the average Close price over last n bars
  • Avg High is the average High price over last n bars
  • Highest( ) is the highest value over last n bars
  • Lowest() is the lowest value over last n bars


Application of Pivot Point

The Pivot Point study provides an indication of where stock price support and resistance levels are.  Used in conjunction with other Technical Analysis indicators, Technical Analysts may place buy and sell orders at the support and resistance levels. 

The Pivot Point study gives daily pivot point resistance and support levels.

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