Technical Analysis

Parag Milk Foods (₹304.6): Buy

Yoganand D BL Research Bureau | Updated on July 18, 2018 Published on July 17, 2018

Investors with a short-term perspective can buy the stock of Parag Milk Foods at current levels. After a short-term downtrend from the all-time high of ₹414 recorded in mid-May 2018, the stock found support in the band between ₹290 and ₹300 in early June. This base zone continued to provide support for the stock and has arrested the recent fall.

Testing this support zone, the stock bounced back, gaining 4.8 per cent, accompanied by above average volume on Tuesday. Moreover, this rally has formed a bullish engulfing candlestick pattern in the daily chart, which is a bullish reversal pattern. The daily relative strength index has re-entered into the neutral region from the bearish zone and the weekly RSI continues to feature in the neutral region. The daily price rate of change indicator is displaying positive divergence, backing the stock’s upward reversal.

The short-term outlook is bullish for the stock. It can continue to move higher and hit the price targets of ₹316.5 and ₹323 in the coming trading sessions. Traders can buy the shares with a stop-loss at ₹297.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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