The Viper Report’s Tom Aspray shares the yearly pivot point analysis for the markets in 2021 as they can give one a unique perspective on support and resistance which is not available through traditional methods.
In my market analysis, I often discuss both monthly and quarterly pivot levels as a way to anticipate future market action. Basic pivot analysis evaluates a stock, market average, or ETF as positive if it is trading above its pivot level. In a positive-trending market, the next level to watch is the first resistance level above the pivot, or R1. Conversely, if a market is below its pivot then the focus should be on the first support level below the pivot, S1. All of these values are calculated using the prior period’s high, low and closing values. When this type of analysis is applied to yearly, quarterly or monthly data it often identifies levels of support and resistance that are not identified with other methods of analysis. You can find more information on pivot analysis and calculation in my article from February. When looking at monthly pivot analysis, the S1 is often a good buying level, if the technical studies are positive. The R1 can often be a good level to sell especially when it coincides with prices being near the daily starc+ bands and warnings from the technical indicators. I also monitor the pivot levels on a yearly basis. Last January, I conducted an analysis of the 2019 price ranges and found they correlated very nicely to the yearly pivot levels, and provided a pivot analysis for 2020. In StockCharts.com, if one adds pivot levels to either weekly or monthly charts, it produces a chart with yearly pivot levels.
