Parag Milk Foods Ltd – Double Top – Short Position

Trade Plan:

Conditions met for Double Top:
• Prior trend before reaching first Top is bullish
• Two equivalent (not necessarily equal) Tops are observed in the supply zone ( Points A & B)
• Volume (indicating major selling and buying) should be high in Second Top or while crossing the Neckline (previous buying zone) which is the case.
• The time gap between 2 equivalent Tops should atleast 30 days. In this case it is 29 days.

Thus, short position can be created when the price hits Rs 297 which is at Point C (at the same level as pull back low of the pattern). Stop Loss will be at Rs. 356 at the resistance line of Point B. Target price at Risk/Reward ratio of 1:1 will be Rs. 239.