Pivot Point Levels and Candlestick Confirmation for Trading

Summary

This article presents the five-point pivot system, calculating the central pivot from the previous period's high, low, and close, then deriving two support and two resistance levels from that pivot and the prior range. It describes using prior-day data for short intraday charts, prior-week data for longer intraday charts, and prior-month data for daily charts. The levels remain fixed throughout the selected period and are intended as reference points for gauging price strength, possible reversals, and potential entries or exits.

The examples are formula-based, including a historical Sensex calculation, rather than a systematic evaluation of profitability. The article suggests watching how price behaves at support and resistance and using candlestick or other indicator signals as confirmation. Its directional guidance is internally inconsistent: one passage associates trading above the pivot with bullish sentiment, while another labels above-pivot trading bearish. It supplies no rules for resolving that conflict, transaction costs, or backtest evidence, so the levels should be treated as heuristic references rather than validated signals.

Key ideas

• The central pivot is the average of the prior period's high, low, and close.
• The five-point system derives two support and two resistance levels using the prior price range.
• Pivot levels can be held constant across a chosen trading period and used as potential reference zones.
• The article suggests combining pivot behavior with candlestick patterns or other indicators.
• Its bullish and bearish interpretation of prices above the pivot conflicts across sections, and no performance test is provided.

Tags

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