How to Calculate a Stock’s Pivot Point
by Chris Perruna
(New Jersey, USA)
The pivot point can be calculated as the stock is forming the handle on a cup-with-handle base. The ideal buy price would be $0.10 higher than the highest spot during the handle, also know as the top of the right side of the base. The intraday high can qualify at the highest point and does not have to be the closing price of the stock. If the stock closes at the high for the day, then we will use this number as the high point.
The exact methods used for finding pivot points vary depending on the base pattern that is forming on a daily and/or weekly chart.
When a flat base occurs, an investor should look for a move $0.10 higher than the top point on the left side of the base or the start of the formation.
A saucer-with-handle follows the same rules as the cup-with-handle and is described in detail above.
A double-bottom formation triggers a pivot point that will be $0.10 higher than the middle peak in the “W” shaped pattern.
www.chrisperruna.com
Join in and write your own page! It's easy to do. How?
Simply click here to return to Tips and Tricks.
Related Reading
The Encyclopedia of Technical Market Indicators: "This encyclopaedia provides an alphabetical and up-to-date listing of hundreds of important market indicators. It defines what each indicator is and explains the philosophy behind the indicator."
Market Club
New Market Club Video:
The 50 Rule:
In this new video, Adam talks about the "50 Rule" and how it can help you to spot reversals.
Software
Fibonacci Price and Time: This is an excellent software program that will calculate Fibonacci price and time levels. Also calculates Gann "Square of Nine". Inexpensive and very easy to use.
Trading Videos
4 Trading Videos:
Now you can watch four trading videos from some of the top traders in the business.
Zecco
This is the broker I use. You get 10 free trades a month with no fees or commissions. Perfect for those new to trading stocks.
100% Free Stock Trade. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com
Trading Course
Trading Master Plan
This is one of the few trading courses on the market right now that is actually worth buying.
You get a 200 page e-book, trading video tutorials, chart lessons, and mp3 audios.
Also includes unlimited personal email support from Dave himself.
Elliott Wave Video
Elliott Wave Video Series
In this 3 part video series, you will learn what the wave principle is, why you should pay attention to it, and how to trade it.
This course is free from the folks over at Elliott Wave International.
