Pivot Points indicate when a market is likely to reach the point at which it changes direction, enabling you to take action. The chart indicates three support and resistance levels.
The three most important pivot points are R1, S1 and the actual pivot point.
The general idea behind trading pivot points is to look for a reversal or break of R1 or S1. By the time the market reaches R2, R3 or S2, S3 the market will already be overbought or oversold and these levels should be used for exits rather than entries.