Building Support and Resistance Channels from Pivot Clusters

Summary

This indicator groups recent pivot highs and lows into price channels to mark potential support and resistance. A pivot is recognized using bars on both sides, and candidate pivots are clustered when their price spread fits a maximum width calculated from the recent high-low range. The script scores channels using included pivot points and historical touches, then displays the strongest selected zones. Channel colors reflect whether price is above, below, or within a zone, and optional alerts and markers identify closes that cross channel boundaries.

The settings allow users to adjust pivot sensitivity, channel width, lookback, minimum strength, and the number of displayed zones. The document explains the construction process and offers visual examples, but gives no systematic test of whether these zones predict reversals or breakouts. Pivot confirmation requires subsequent bars, and levels depend on parameter choices and the selected price source. The indicator is a charting aid; its signals alone do not establish a trading edge.

Key ideas

• The indicator identifies pivot highs and lows using a configurable confirmation period.
• Nearby pivots are grouped into channels constrained by a width derived from the recent trading range.
• Channel strength combines pivot clustering with the number of historical price touches.
• The strongest zones can be displayed with color changes and optional boundary-crossing alerts.
• The document gives no empirical evidence that channel touches or breaks are profitable signals.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.