00:00Ever bought a stock at the top only to see it fall right after?
00:04What if I told you that the chart already warned you, but you did not listen?
00:08With a pattern like M in the chart, the double top is a bearish reversal pattern that tells you,
00:15Boss, buyers are tired and sellers are taking over.
00:18It forms after an uptrend, when the price hits the same resistance level twice,
00:23but fails both times and falls through support.
00:27Imagine a stock climbing a hill, reaches the top, rolls down.
00:32Tries climbing again, the same kind of hill, well, rolls down again.
00:38That hill top is your two peaks.
00:40The ground level between them is the neckline.
00:43When price breaks below the neckline, the M becomes your bearish signal.
00:48So, how do traders use it?
00:50Well, it's simple.
00:51Your entry should be when the price breaks below the neckline with strong volume.
00:57Stop loss, just above the second top.
01:00Measure the height from the top to the neckline.
01:03Project the same distance downward.
01:06Well, here's the easy way to see it.
01:08Top is Rs. 150.
01:10Neckline is Rs. 130.
01:12So, the height of the pattern is Rs. 150 minus Rs. 130, which is Rs. 20.
01:18Now, if the price breaks below Rs. 130, you simply subtract Rs. 20 again.
01:24Rs. 130 minus Rs. 20, which is Rs. 110.
01:27That's your target price, which is Rs. 110.
01:30And the stop loss, just above the second top, around Rs. 155.
01:35Volume is the truth teller.
01:38Low volume breakout, don't trust it.
01:40Big volume spike, sellers are taking charge.
01:43Chances of reversal.
01:45So, when you spot that M on the chart, it usually means one thing.
01:49Move out.
01:50Keep it simple, follow the pattern and follow Navia Markets for more.
01:54Investments in securities markets are subject to market risk.
01:57Read all related documents carefully before investing.
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