Flowing against the tide: Dr.Reddy's Laboratories not far from its 52 week high

Published October 17, 2018

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The broader index Nifty 50 has corrected almost 10 per cent from its 52 week high. But Dr. Reddy's Laboratories is the only component in Nifty 50 that is very close to its 52 week high.

Dr. Reddy's Laboratori (DRREDDY.NS) Close: 2 573.60

Dr. Reddy's Laboratories  broke out of the falling trend channel in the middle of august, as shown in the long term graph.

The stock gave a breakout from a double bottom formation and fell back, but only to revert back and rise again. A resistance level of 2400 rupees has also been broken. This may be an early signal of a change in trend to the positive side. There will now be support around 2400 levels.

Long term momentum in the stock is inching up, hence indicating buying interest in the stock.

In the short term the stock price is just under 2610 rupees. A close above this level may give a good opportunity for short term traders to initiate new buy only with a strict stop loss, if price closes below 2350.

Since DRREDDY is presently under its long term resistance of 2770, our outlook on the stock is Watch. However, a break and close above this level will upgrade our outlook in the stock to positive for the longer term.

Investtech's outlook one to six months: Hold

It would be interesting to see how investors treat the stock in the near future.

The analyses are based on closing price as per October 16, 2018. Maintaining proper stop loss is always recommended.