What is a pivot point in stock market analysis?

A pivot point is a technical analysis tool that helps traders and investors determine price levels in the stock market. It's calculated from the high, low, and closing prices of the previous trading day: Calculation The pivot point is the average of the previous day's high, low, and closing prices. Use Traders use pivot points to identify trends, reversals, and potential support and resistance levels. Interpretation If the price trades above the pivot point on the next day, it's considered a bullish trend, while trading below the pivot point indicates a bearish trend. Confirmation It's important to confirm pivot point signals with other technical analysis indicators. Additional levels Some analysts use additional levels above and below the pivot point to define a range called the Central Pivot Range (CPR). read less