You are here: Technical Analytics > Chart Indicators > Pivot Points

Pivot Points

The Pivot Point indicator calculates the numerical average of a stock's high, low and closing prices, and is used to help identify resistance and support levels. We calculate pivot points using the five-point system, which uses the previous day's high, low and close to get the pivot point, and then calculates two resistance levels and two support levels, as follows:

R2=P + (H-L) = P + (R1-S1)
R1 = (P x 2) - L
P = (H + L + C) /3
S1 = (P x 2) - H
S2 = P - (H - L) = P - (R1 - S1)

where "S" is the support levels, "R" is the resistance levels, "P" is the pivot point, H, L, C are high, low and close, respectively.

 

To add a Pivot Point indicator

  1. From within a chart, from the Edit menu select Studies.
  2. Choose Pivot Points and Add the study.
  3. Complete parameters as necessary.

    Note:  It is possible that in some cases, for example when the closing price is near the high or low and there is a wide range, the S1 or R1 value will be above the PP.

Important Disclosures