Technical analysis
Pivot point (P)
Definition
The average of the prior period’s high, low and close. The central line of the day, often read as the balance point between buyers and sellers.
Example
Say a stock’s prior day had a high of $52.00, a low of $48.00 and a close of $51.00. The pivot point is ($52.00 + $48.00 + $51.00) ÷ 3 = $50.33. If today’s session opens at $51.20 and holds above $50.33, many traders read buyers as having the upper hand; trading below it tilts that read toward sellers.
Hypothetical numbers, for illustration only.
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