understanding pivot point

Hi to all...
I am seeing here and some other site people recomend their list..
like for tomorrow it is
ICICI BANK pivot point is 827, support level S1 is 810 and s2 is 825; Resistance level R1 is 845 and R2 is 835

Now i am woundering what does it mean?????

does it mean..
when i want to buy then buy it at pivot point.. that is here 827 and wait till it goes to R1 (= 845) and sell 50% of share when it comes to R1 and rest 50 % when its at R2.

I am right ? but what is support level then??

Please, please help to understand those stuff.

Thanking you
Bharat

Pivot point:
A technical indicator derived by calculating the numerical average of a particular stock's high, low and closing prices.

Investopedia Says... The pivot point is used as a predictive indicator. If the following day's market price falls below the pivot point, it may be used as a new resistance level. Conversely, if the market price rises above the pivot point, it may act as the new support level.


How to Calculate Pivot Points:
There are several different methods for calculating pivot points, the most common of which is the five-point system. This system uses the previous day's high, low and close, along with two support levels and two resistance levels (totaling five price points) to derive a pivot point. The equations are as follows:

R2 = P + (H - L) = P + (R1 - S1)
R1 = (P x 2) - L
P = (H + L + C) / 3
S1 = (P x 2) - H
S2 = P - (H - L) = P - (R1 - S1)

Here, "S" represents the support levels, "R" the resistance levels and "P" the pivot point. High, low and close are represented by the "H", "L" and "C" respectively. (Note that the high, low and close in 24-hour markets [such as forex] are often calculated using New York closing time [4:00 p.m. EST] on a 24-hour cycle. Limited markets [such as the NYSE] simply use the high, low and close from the day's standard trading hours.)

Please go through this article:
Source: http://www.investopedia.com/articles/technical/04/041404.asp

Regards,
Praveen.

Thank you Praveen
but i am still not getting. My question is when i want to buy a share... should i buy at pivot pont price? and sell it at resistance level?? is that so?

Hi,

I've not traded them.

But I've read that the traders use them as the key Support and Resistance levels. Seems they are popular in day trading.

Although you are correct, the trading style depends upon each individual trading style. Some traders buy at pivot point or support, and sell it at resistance levels (R1, R2, etc).

Experienced users who are trading them can give better reply.

Regards,
Praveen.

Thank you praveen.

Welcome Bfumakiya, and all the best.

Praveen.