Pivot Point Analysis is a famous technique and very good technique which is used as forecast price of a particular stock for day traders and professional traders as well. It is very popular among professionals.
It is a very easy technique to learn. Through this you can calculate the support and resistance levels.
.
The Pivot point number is the high, low, close added up and then divided by three.
(PIVOT POINT) P=(H+L+C)/3
Here is the formula where P= Pivot point; C= Close: H= High: and L= Low
Now for the first resistance level take the pivot point number times two and then subtract the low.
Resistance 1=(Px2)-L
For the second resistance, take the pivot point number add the high and then subtract the low.
Resistance 2 = P+H-L
For the first support take the pivot point number times two and then subtract the high.
Support 1=(Px2)-H
For the second support, take the pivot point number subtract the high and then add the low.
Support 2=P-H+L
Now You can calculate using this pivot point to ensure the support and resistance levels for any stock daily or weekly or monthly or yearly.
If any stock breaks the resistance level,then it can move upto the first reisitance which is newly created and this indiactes a bullish sign.
On the other hand if the support level is broken then it may take a newly created support level and resistance level and this generally indiactes a bearish sign.
After Knowing this little details,You should know little bit about the charts which gives a little more details for trading.
