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Pivot Point is a technical indicator used in technical analysis derived by calculating the numerical average of a particular stock's (or any other financial asset like forex pair or any future contract) high, low and closing prices.
On the following day, if the market price trades above the pivot point it is usually considered as a bullish sentiment, whereas if it trades below the pivot point is seen as bearish
A pivot point and the associated support and resistance levels are often turning points for the direction of price movement in a market. In an up-trending market, the pivot point and the resistance levels may represent a ceiling level in price above which the uptrend is no longer sustainable and a reversal may occur. In a declining market, a pivot point and the support levels may represent a low price level of stability or a resistance to further decline.It is customary to calculate additional levels of support and resistance, below and above the pivot point, respectively, by subtracting or adding price differentials calculated from previous trading ranges of the market.