Pre-Calculated Levels for Intraday Support and Resistance
Pivot Points give traders a framework for planning entries, exits, targets, and stops before the session starts. They also reveal intraday trend direction.
What Are Pivot Points?
A Pivot Point (P) is calculated from the previous day’s high, low, and close. From that central point, traders derive R1 and R2 resistance and S1 and S2 support. These lines stay unchanged for the trading day.
P = (High + Low + Close) / 3. R1 = (P × 2) – Low. S1 = (P × 2) – High. R2 = P + (High – Low). S2 = P – (High – Low).
If price is above a pivot level, that level acts as support. If price is below it, the level acts as resistance — regardless of the label.
Why Pivot Points Are Powerful
You know the major levels before the open, which helps you plan trades and set alerts.
Because so many traders and algorithms watch them, the levels often become self-fulfilling.
Trading above P suggests an intraday uptrend. Trading below P suggests an intraday downtrend. A break above R1 often targets R2. A break below S1 often targets S2.
Fortified Pivot Levels
Pivots are strongest when they overlap with a 20, 50, or 200 EMA, VWAP, a previous high or low, a Fibonacci level, or a psychological price. Overlap creates a bigger reaction and a more reliable target.
Pivot Points reset daily, so they are mainly an intraday tool. Price may overshoot a level slightly before reacting. Combine them with volume and trend indicators.
Key Takeaways
- Pivot Points use the previous day’s range to calculate today’s levels
- S1/S2 and R1/R2 act as support and resistance
- Price above the pivot is bullish; price below is bearish
- They are useful for planning targets and stops
- They are strongest when layered with other technical levels
- Best suited to day traders and momentum strategies
Pro Tips
- The main pivot (P) is the most reactive level — watch it closely at the open.
- Above P is a bullish bias; below P is a bearish bias.
- R1 and S1 are the best levels for the first reaction of the day.
- Pivot plus EMA plus a previous high or low is a fortified zone.
- Pivot rejections on weak volume can be clean short opportunities.
- Use pivots to pre-plan targets, stops, and levels before the open.