How to calculate pivot point support and resistance
In this article I will discuss how to calculate support and resistance level easily with excel or Openoffice / LibreOffice Calc. This is another important thing, you really need to calculate the resistance and support level of a stock before you invest or trade.
Free and automated Support and Resistance level calculator for you:
Chart Infinities 2.0 is capable of generating support and resistance level along with candlestick or OHLC chart for you. We offer free EOD candlestick, OHLC, comparison chart along with technical analysis such as support and resistance level calculator and bearish and bullish trend indicator for free of cost. So, if you are looking for stock chart or support and resistance level generator for Australia, Canada, France, Germany, Indonesia, India, Israel, New Zealand, United Kingdom, United States, Malaysia, Singapore, South Africa, Thailand feel free to use the chart we provide for free of charge. Please click on analysis tab at the bottom of the chart to see support and resistance level, Click here to visit Chart Infinities 2.0.
If you do not want to use our chart or your country does not match above mentioned country lists, then I will explain in this article how to do calculate support and resistance level without any software or script. However I would like to inform you that this an advanced level article, if you haven't gone through with the basics yet please feel free to go through with Basic Terms of Stock Market, Basic Terms of Investment and Trading, Basic FAQs for the beginners in stock markets, Few preliminary basic terms of Trading, Basic homework for beginners for stock market, How to read Candlestick Chart without any complication. However before reading any of these tutorials or deciding about trading or investing please do not forget to check whether your conditions are suitable for stock markets or not from Few questions you need to ask yourself before your first step in stock market.
Why do I need to calculate Support and Resistance level?
Calculating support and resistance is a part of technical analysis. Support and resistance level can not tell you what will exactly happen in next trading session. Although support and resistance level give you a fair picture of a stock's next move. Support and resistance level is considered as maximum points, that means if support or resistance level calculated 100, in this case the stock price might not increase/decrease beyond that level. Usually stock price changes lesser than calculated support and resistance level, however sometimes the price might go beyond calculated support and resistance level .
What are the values do I require to calculate support and resistance level?
You need open, high, low, close values of a stock to calculate support and resistance level.
What is Resistance Level?
We calculate resistance level to know, how much a stock price might increase on its next trading session. Resistance level is being calculated in three parts. But before you start calculating you need to calculate pivot point.
What is pivot point?
In simple meaning pivot point is an average of a stock price during the day.
How to calculate pivot point?
There are two ways or formulas to calculate pivot point.
Formula 1: Pivot Point=(High+Low+Close)/3
Formula 2: Pivot Point=(Open+High+Low+Close)/4
Chart Infinities uses formula 1 to calculate pivot points for our users.
What are the formulas of resistance level calculation?
Whenever we calculate resistance level we calculate in three levels. Usually a stock's movement stays between the Level 1 and 2. However sometimes depending on buyer or seller’s trend a stock might go beyond Level 1 and 2 till 3. In very rare scenarios stock price goes beyond level 3.
Resistance Level 1: (Pivot Point * 2) - Low.
Resistance Level 2: Pivot Point + ( High - Low)
Resistance Level 3: High + 2 * (Pivot Point - Low)
What is Support Level?
We calculate support level to know, if a stock price starts to decrease, in that case what extend the price might decrease. Support levels are also being calculated in three levels. Usually stock price stays between Level 1 and 2 as resistance level.
What is the formula of support level calculation?
Support Level 1: (Pivot Point * 2) - High
Support Level 2: Pivot Point - (High - Low)
Support Level 3: Low - 2 * (High - Pivot Point)
How to calculate support and resistance level with Excel or Calc?
You can use these formulas to calculate support and resistance level in excel. Or you can download the support and resistance level calculator, which I created for you form the link given below.
Before you start trading do not forget to go through with another three tutorials which state How to read financial report or Balance-sheet, When Why and How stock price changes, and Few things need to care about while trading.
Support and Resistance calculator in Excel: Click Here to Download MD5:426acf2974b4a7f4f80f2b674b12b946