Technical analysis, Pivot Point, support, resistance, trading, Pivot Points, price, analysis

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Pivot Point
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Pivot Points Analysis

Technical Analysis
MV Volume Indicators

Technical Analysis, Studies, Indicators:

Pivot Point

Index Volume
VMA
VMA Displaced
SBV Oscillator
SBV Histogram
Selling & Buying Volume
AD Sentiment
MVO
AD Momentum
AD Momentum VMA
AD Indicators
AD Volume
Adv - Decl Volume Osc
Adv/Decl Volume Ratio
AD Issues
Advance Decline Line

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Description: technical analysis, volatility,
support and resistance levels, stop-loss trading
strategy, generation signals, market timing, chart example.
In technical analysis, Pivot Points are used to determine sensitive trading levels at which
the price trend is predisposed to change direction - possible support and resistance lines.
Pivot Points are trend-predicting indicators (leading indicators) that are based on the
average of the previous day's High (H), Low (L) and Close (C) prices. While intraday
charts are the most popular timeframe for use with Pivot Points, some technical analysts
may prefer to use Pivot Points in longer timeframes where they are based on the
average weekly or monthly Open, High and Low Prices.
A common way of representing Pivot Points is by five lines where the center line is the
Pivot Point (PP) Line, the two lines above the Pivot Point are the first and second
Resistance levels and the two lines below Pivot Point are the first and second Support
levels. As was mentioned above, the Pivot Point is calculated as the average price and is
based on the previous period High, Low and Close prices. However, some technical
analysts may prefer to use only High and Low prices or add the Open price:
Buy / Sell Signals
PP = (H + L + C) / 3
or
PP = (H + L) / 2
or
PP = (O + H + L + C) / 4

http://www.marketvolume.com/technicalanalysis/pivot_point.asp

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Technical analysis, Pivot Point, support, resistance, trading, Pivot Points, price, analysis

Adv - Decl Issues Osc.

Adv/Decl Issues Ratio
Adv / Decl PO
New Highs/Lows
Absolute Breadth
Breadth Trust
TRIN
McClellan Oscillator
McClellan Summation

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The first Resistance (R1) and Support (S1) are based on the difference between the
Pivot Point line and the previous period's High and Low prices and are calculated as
R1 = PP + (PP - L) = 2 x PP - L
and
S1 = PP - (H - PP) = 2 x PP - H

Submit

Stock Exchange
AMEX

The second Resistance (R2) and Support (S2) lines are based on the width of the trading
range (High - Low) and are calculated as
R2 = PP + (H - L)
and
S2 = PP - (H - L)

NASDAQ
NYSE

Nasdaq in a month?
Up

The formula for the second resistance and support lines is commonly used to determine
higher support and resistance levels:

The same as now

Down

Rn = PP + (n - 1) x (H - L)
and
Sn = PP - (n - 1) x (H - L)
where n is the support/resistance level number.
In technical analysis, Pivot Points are used primarily as predictive indicators of
stock/index/market movements. If, at the market open a stock, an index or any other
commodity is traded above the Pivot Point, this is generally associated with positive
(Bullish) sentiment. Conversely, stock traded below the Pivot Point is associated with
Bearish sentiment. Based on this knowledge a trader may adjust his/her trading strategy
of using other technical studies to trade only "Buy" signals when the price is above the
Pivot Point and trade only "Sell" signals when the price moves below the Pivot Point.
Another approach when using Pivot Points is to trade Support and Resistance levels.
Technical analysis states that, at the Pivot Support and Resistance levels, a stock's price
is predisposed to change its trend. Since these levels do not signal changes in a price
trend and only indicate the weaknesses of the trend, the most common way of using
Support and Resistance levels is to use them as a profit target and stop-loss level. For
instance, if the stock is traded above the Pivot Point, a trader may decide to open a Long
trade with a stop loss a few points below Pivot Point. When the stock price advances
above the first Support line, the trader may move the stop-loss a few points below the
first Support line, and so on.

http://www.marketvolume.com/technicalanalysis/pivot_point.asp

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Technical analysis, Pivot Point, support, resistance, trading, Pivot Points, price, analysis

Chart 1: S&P 500 chart with Pivot Points

Blue Line - Pivot Point; Green Lines - Resistance Lines, Red Lines - Support Lines

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