Pivot Point Calculations Technical Analysis

Introduction & Importance

Pivot point calculations are a technical analysis tool used to identify support and resistance levels in financial markets. They are based on the previous day’s high, low, and closing prices, as well as the previous day’s opening price.

How to Use This Calculator

1. Select the period (daily or weekly).
2. Enter the previous day’s closing price.
3. Click ‘Calculate’.

Formula & Methodology

The pivot point is calculated as the average of the high, low, and closing prices of the previous period. The support and resistance levels are then calculated based on the pivot point.

Real-World Examples

Example 1

Previous day’s high: $50.00, Low: $45.00, Close: $48.00

Pivot Point: ($50 + $45 + $48) / 3 = $47.67

Support 1: $47.67 – ($47.67 – $45.00) = $46.17

Resistance 1: $47.67 + ($50.00 – $47.67) = $48.33

Data & Statistics

Pivot Point	Support 1	Resistance 1
$47.67	$46.17	$48.33

Expert Tips

• Pivot points are most effective when used in conjunction with other technical analysis tools.
• They work best in trending markets.

Interactive FAQ

What are pivot points?

Pivot points are technical analysis indicators used to identify support and resistance levels in financial markets.

How are pivot points calculated?

The pivot point is calculated as the average of the high, low, and closing prices of the previous period.

For more information, see the Investopedia guide on pivot points.