Dr.Reddy’s Laboratories: Good Prescription To The Portfolio

We covered the outlook for Dr.Reddy’s Laboratories in January. Though the stock hit our stop loss, it has since managed to get past the then mentioned target of Rs.2,850-2,900. We maintain a positive view on Dr.Reddy’s Laboratories and here are the reasons for the same. Have a look at the daily chart of Dr.Reddy’s Lab featured below.

The stock has managed to clear the medianline or the middle-line of the blue pitchfork.  After the breakout past the medianline, the price has managed to consolidate above this line in the past few  trading sessions, which is a sign of strength. We expect the Dr.Reddy’s Lab stock to hit the upper blue parallel of the blue pitchfork at Rs.3400+.

The positive view would be under threat if the stock falls below the minor support at Rs.2,750. As always, investors may adopt a SIP-kind of approach and accumulate the stock on weakness.

(The view featured here is based on Technical Analysis of historical stock price action. Please read the Disclaimer)