A pivot point is a technical indicator to identify trends and reversals in any market. Pivot points are calculated to determine critical levels in which the price could find its support and continues in the same direction or change from bullish to bearish, and vice-versa. We can use Pivot points to find entry, stops, and profit-taking by trying to determine the psychology of the market.
When we are above the pivot point the market is bullish. In a bullish market if we cross a resistance level the uptrend will continue but if it bounces back we can expect a trend reversal.
When we are below the pivot point the market is bearish. In a bearish market if we cross a support level the downtrend will continue but if it bounces back we can expect a trend reversal.