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)