StockSignal
Support 1 (S1) is the first support level below the pivot point, calculated from the previous period's price range. It marks a potential area where buying interest may increase.
Support 1 (S1) is the first support level calculated from pivot point analysis, representing a potential price floor below the central pivot point. When price declines from the pivot, S1 is the first level where buying pressure may emerge to halt the decline. As a widely watched level, S1 often sees increased trading activity and potential reversals.
The calculation:
Support 1 (S1) = (2 × Pivot Point) - Previous High
Example:
Previous High: $55 Previous Low: $45 Previous Close: $50 Pivot Point: ($55 + $45 + $50) / 3 = $50 S1: (2 × $50) - $55 = $45
Why S1 matters:
- First support level: Initial level where decline may stall
- Widely watched: Many traders monitor and trade around S1
- Entry zone: Potential long entry point for bounces
- Breakdown level: Break below S1 signals weakness toward S2
Interpreting price action at S1:
- Bounce at S1: Support holding; potential long entry
- Break below S1: Support failed; price may test S2
- Multiple tests: Repeated tests weaken support
- Volume at S1: High volume increases significance of reaction
Trading applications:
- Long entries: Buy bounces off S1 with stops below
- Short targets: Use S1 as profit target for shorts from above
- Breakdown trades: Short when S1 breaks with confirmation
- Risk management: Place stops just below S1 for longs
S1 in context:
- Above pivot: Market bullish; S1 unlikely to be tested
- Between pivot and S1: Mild bearish; S1 test possible
- Below S1: Bearish; next target is S2
Combining with other analysis:
- Confluence: S1 at moving average increases significance
- Trend filter: Trade S1 bounces only in uptrends
- Volume confirmation: Watch for volume spike at S1 test
- Candlestick patterns: Look for reversal patterns at S1
Limitations:
- Not guaranteed: Support can fail, especially in strong downtrends
- Approximate level: Price may reverse near S1, not exactly at it
- Context matters: Less effective against strong trends
S1 provides traders with the first objective support level for the session. Its effectiveness comes from both technical significance and the self-fulfilling nature of many traders watching the same level.