Pivot Points, Support, and Resistance are all tools used in technical analysis,but they serve change roles. Here’s a breakdown of the differences:

1. Pivot Points (PP)

• Definition: A pivot point is a central price level calculated using the previous period’s high, low, and close.

• Purpose: Acts as a baseline indicator for market direction. If the price is above the pivot point, it’s considered bullish; below, bearish.

• Formula:

\text{Pivot Point (PP)} = \frac{High + Low + Close}{3}

2. Support Levels (S1, S2, S3, etc.)

• Definition: These are price levels below the pivot point where price may find buying interest (support).

• Purpose: Suggest possible “floor” levels where price could bounce up.

• Derived From: Calculated based on the pivot point, previous high, and low.

• Example (for S1):

\text{S1} = (2 \times PP) - High

3. Resistance Levels (R1, R2, R3, etc.)

• Definition: Price levels above the pivot point where price may face selling pressure (resistance).

• Purpose: Suggest potential “ceiling” levels where price could reverse down.

• Example (for R1):

\text{R1} = (2 \times PP) - Low