Pivot Points
Mathematically derived price levels calculated from the prior session's high, low and close — the intraday trader's pre-built support and resistance map.
Definition
Pivot points are a set of horizontal price levels calculated automatically from the prior trading session's high, low, and closing price. They give intraday traders a ready-made framework of support and resistance levels before the market even opens, without requiring any manual chart reading. The central pivot (PP) is the most important level; additional resistance levels (R1, R2, R3) sit above it and support levels (S1, S2, S3) sit below it.
Why it matters
Pivot points are among the most widely followed tools in Indian intraday trading, especially for NIFTY and BANKNIFTY futures and options. Because they are calculated from a fixed formula, a large number of traders are watching the same levels simultaneously — which becomes a self-fulfilling dynamic. Scalpers and intraday traders use them to identify potential turning points, set targets, and place stop-loss orders. When price opens above the central pivot, the bias is considered bullish for the day; below it, bearish. A move through R1 or S1 on momentum often accelerates toward R2 or S2.
Formula
The standard (floor trader) pivot point formulas are:
PP = (Prior High + Prior Low + Prior Close) ÷ 3
R1 = (2 × PP) − Prior Low
R2 = PP + (Prior High − Prior Low)
S1 = (2 × PP) − Prior High
S2 = PP − (Prior High − Prior Low)
Variants such as Camarilla, Woodie, and Fibonacci pivot points use different weightings but follow the same principle of deriving levels from prior-session data.
Example
Suppose NIFTY 50 closed the previous session with a high of 23,500, a low of 23,200, and a close of 23,380. The pivot point would be (23,500 + 23,200 + 23,380) ÷ 3 = 23,360. R1 = (2 × 23,360) − 23,200 = 23,520; S1 = (2 × 23,360) − 23,500 = 23,220. A trader entering on the next session's open near 23,360 might target R1 at 23,520 and keep a stop below S1 at 23,220. These figures are hypothetical and for illustration only.
Trade around today's pivot levels
TradePulse's option chain shows real-time OI build-up near calculated pivot zones.