Whether you are a price action, a pattern, an indicator or whatever trader, if you are able to identify strong price levels on your charts, it can greatly improve the quality of your trading.
Instead of taking signals and trades all over the place, the better trades usually happen at key price levels. Those strong areas of interest show that buyers and sellers are concentrating at those levels and they can be the starting or turning points for new price moves and mark new trends as well.
Let’s look at one such Strategy based on Pivot Points.
What are Pivot Points?
Pivot points are prominent lines that are based on the course itself to determine possible support and resistance.
This feature is readily available in NeoTrader under the Stock Analyzer page. NeoTrader provides Multi time-frame Analysis for Pivot Points and one can find clusters to map the market for Support and Resistance zones.
Below is one such example, the snapshot is taken directly from the Application “NeoTrader” for Nifty.
Examining the table, One can find a combination of values that are close enough together to form a cluster. Refer to the marked levels in the image above.
Once the pivot clusters are found, One can plot those on the charts to find the Support and Resistance for the instrument. When prices do reach these pivot cluster zones, Watch price carefully to look for quick price reaction or rejection. One can Sell when Supports are broken, Buy on Dips, Book profits at Resistance, Short on Resistance, etc.
Reading the Pivot Analysis:
Being a truncated week, Streets will expect minimal moves to happen but Markets are known to show always an exception. The important cluster of 8280 was missed during the decline in the initial session today and reversed back towards the high levels of the day. This shows strength persisting in the gap up today. Thus, the probability of testing the next cluster at 8652-8665 levels are high. considering the positional pivots, Nifty is trading above the strong cluster supports at 7658-7678 levels and the next levels lie at 9166 levels and this can be taken as the next level if resistance at present. Thus, the Bullishness is poised and dips towards supports should be utilized to create long positions…
For Eg. We had the Nifty Pivot clusters ready and were plotted on the intraday charts. Refer to the image below how well the clusters have worked. The same procedure can be followed for stocks as well.
Pivot clusters are very valuable Support and Resistance zones that help to map the Market. And is readily available in NeoTrader.
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