NISM Certifications · NISM-Series-XV: Research Analyst · Technical Analysis
A stock trades with a high of Rs 210, low of Rs 190 and close of Rs 200 on the previous day. Using classic floor-trader pivot formulas, what are the first resistance (R1) and first support (S1) for the next day?
R1 is Rs 210 and S1 is Rs 190. The pivot is (210 + 190 + 200)/3 = Rs 200. First resistance is twice the pivot minus the low, 400 - 190 = 210, and first support is twice the pivot minus the high, 400 - 210 = 190.
- AR1 = Rs 210, S1 = Rs 190Correct
- BR1 = Rs 205, S1 = Rs 195
- CR1 = Rs 220, S1 = Rs 180
- DR1 = Rs 210, S1 = Rs 200
Explanation
Pivot P = (210+190+200)/3 = 200. R1 = 2P - Low = 400 - 190 = 210. S1 = 2P - High = 400 - 210 = 190. Rs 220/180 would come from adding or subtracting the full range wrongly, and Rs 205/195 uses half the range.
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