Dr.Reddy’s Laboratories: Time To Buy

January 7, 2014 . FundsIndia Desk

The stocks from the pharmaceutical sector have been performing well recently. Be it the large cap ones such as Divis Lab or Lupin or the small and mid cap ones such as Dishman, Aurobindo Pharma and Shasun, the entire sector has been an outperfomer.  We take a look at Dr.Reddy’s Lab which has completed a correction and looks set to resume its uptrend.


From the weekly chart featured above, it is clear that the stock has respected the red set of trendlines. The stock has settled comfortably above the upper red line and we now expect the uptrend to continue to the centre line of the blue pitchfork at Rs.2,700+.

The positive view would be invalidated if Dr.Reddy’s Lab falls below Rs.2,390. Investors may use a SIP-kind of approach to accumulate this stock. Beyond Rs.2,700, we would expect the stock to proceed to Rs.2,850-2,900.

As always, patience is the key requirement in profiting from such medium to long term recommendations. Do not expect fireworks similar to the small and mid cap stocks. A steady upward progression is what we anticipate.

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

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4 thoughts on “Dr.Reddy’s Laboratories: Time To Buy

  1. Why are the stocks recommended here are ones which are already at 52-week high or very close to it? It seems most of the suggestions here are for stocks which have already seen a considerable momentum. Can we also have some proactive recommendations (as opposed to reactive) before the upswing happens?

    1. Hi Mitesh,

      Can you please elaborate what being proactive and reactive means? We do not have a crystal ball to find out which stocks would get into a upswing. Hence, we typically wait for early signs of buying interest before putting out a recommendation.

      And, your point about recommending stocks at 52-week high is slightly misplaced. We recently recommended Voltas, Tata Steel, Divis and Liberty Shoes. Not all of them were 52-week high candidates.

      There is nothing wrong in recommending a stock that hits 52-week high! The only point that is crucial is whether you make money after investing. Our recent recommendation – Dr.Reddy’s too has performed well.

      Hope this addresses your concerns. If not, drop a line.



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