Pivot Point
Technical Analysis
What it means
A single calculated price level (average of yesterday's high, low, and close) used to project today's support and resistance levels.
Example
If yesterday's high was $102, low $98, and close $100, today's pivot is (102+98+100)/3 = $100. Levels above it act as resistance, below as support.
Mistake beginners make
Beginners expect price to reverse exactly at a pivot. Pivots are zones, not lines; price often overshoots by a tick or two before reacting.
Related terms
- Support — A price level where buying tends to appear and stop a decline. Price has bounced there bef…
- Resistance — A price level where selling tends to appear and stop a rally. Price has stalled there befo…