Pivots Points are significant levels chartists can use to determine directional movement, support and resistance points.
Pivot Points use the prior period's high, low and close to formulate
future support and resistance areas. In this respect, Pivot Points are
considered to be leading indicators with predictive qualities. Pivot
Points were originally used by floor traders to determine key levels to
enter and exit positions. Floor traders are considered to be the
original day traders. They deal in a very fast moving environment with
often a very short-term focus. At the beginning of the trading day,
floor traders would look at the previous day's high, low and close to
calculate a Pivot Point for the current trading session. With this Pivot
Point as the base, further calculations were made to set support 1,
support 2, resistance 1 and resistance 2. These levels would then be
used to assist their trading during the day. In this technical piece we
will be constructing weekly pivot points for next week's trade on some
of the popularly traded markets.
Daily E-Mini S&P 500
According
to pivot trading techniques there could be more on the upside for
S&P 500 futures, possible up to the 2058.00 area.
Weekly Crude
All charts provided by QST Crude
oil futures have been in a protracted decline since June. Pivot point
analysis suggests futures may continue to decline to the pivot point
support that comes in at 71.00.
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