Pivot Point Calculation

                                       A pivot point is a price level of significance in technical analysis of a financial market that is used by traders as a predictive indicator of market movement. A pivot point is calculated as an average of significant prices (high, low, close) from the performance of a market in the prior trading period. If the market in the following period trades above the pivot point it is usually evaluated as a bullish sentiment, whereas trading below the pivot point is seen as bearish.

Calculation

  Several methods exist for calculating the pivot point (P) of a market. Most commonly, it is the arithmetic average of the high (H), low (L), and closing (C) prices of the market in the prior trading period:

                 P = (H + L + C) / 3.

Sometimes, the average also includes the previous period's or the current period's opening price (O):

                P = (O + H + L + C) / 4.

In other cases, traders like to emphasize the closing price,

                P = (H + L + C + C) / 4,  or  the current periods opening price, P = (H + L + O + O) / 4.

Ref :http://en.wikipedia.org/wiki/Pivot_point_calculations