Pivot Point
A reference price computed from the previous period's high, low and close, with support and resistance levels derived from it.
Formula
Pivot P = (High + Low + Close) / 3; R1 = 2P - Low; S1 = 2P - High; R2 = P + (High - Low); S2 = P - (High - Low)
Unit
₹
In depth
Pivot points are entirely mechanical — no judgement enters the calculation, which is their genuine advantage over hand-drawn levels: everyone using the same formula gets the same numbers. That shared visibility is also the main explanation for any tendency of price to react at them, since it is a coordination effect among traders rather than a property of the security. Several variants exist, including Woodie, Camarilla and Fibonacci pivots, which produce different levels from the same data. The levels are a convention for framing a session, not a forecast, and none is offered here.
Worked example
Previous session high ₹512, low ₹494, close ₹504. P = (512 + 494 + 504) / 3 = ₹503.33. R1 = 2 x 503.33 - 494 = ₹512.67 and S1 = 2 x 503.33 - 512 = ₹494.67.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Pivot Point” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.