Pivot Point

A pivot point is a technical analysis indicator used to determine the overall trend of the market
during different time frames. The pivot point itself is simply the average of the high, low and
closing prices from the previous trading day.
Standard Pivot Points begin with a base Pivot Point. This is a simple average of the high, low
and close.

Pivot point (PP) = (high+low+close)/3

Support 1 (S1) = (P * 2) – High

Support 2 (S2) = P - (High- Low)

Resistance 1 (R1) = (P *2) – Low

Resistance 2 (R2) = P + (High – Low)

Support line

Support is a price level where a downtrend can be expected to pause due to a concentration
of demand. As the price of a security drops, demand for the shares increases, thus forming the
support line. The support level is always below the current market price. There is a
maximum likely hood that the price could fall till the support, consolidate, absorb all the
demand, and then start to move upwards. The support is one of the critical technical level
market participants look for in a falling market. The support often acts as a trigger to buy.
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Resistance

As the name suggests, resistance is something which stops the price from rising further.
The resistance level is a price point on the chart where traders expect maximum supply (in
terms of selling) for the stock/index. The resistance level is always above the current market
price. The resistance is one of the critical technical analysis tool which market participants
look at in a rising market. The resistance often acts as a trigger to sell.

Calculation of pivot point, resistance and support line for Sun Pharma as on 25 June, 2018

Opening price = 576.90

High = 592.00

Low = 567.95

Closing price = 571.80

Pivot Point = (592+567.95+571.80)/3 = 577.25

Support 1 = (577.25*2) – 592 = 562.5

Support 2 = 577.25 – (592 – 567.95) = 553.2

Resistance 1 = (577.25*2) – 567.95 = 586.55

Resistance 2 = 577.25 + (592- 567.95) = 601.3