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I cannot find any specific news on Dr. Reddy's Laboratories (NYSE:RDY) and it was not down a material amount in India overnight, so I am not sure why it is being hit so hard in the U.S.

Whatever the case, in the past two sessions it has weakened considerably and if it closes where it is as I type, it will have broken the 50-day moving average on a closing basis for the first time since mid May. That is always a concern and the general policy when this happens is reduce exposure and then watch what it does next.

Hence, I am going to shoot first and ask questions fourth and cut the position back by 2/3rds and wait to see if the stock can regain its footing. (I lost under 2% on these shares, but gave up some nice unrealized gains) If the name continues to struggle in the coming week or two I'll most likely close out the remaining position; if it can quickly regain its footing I'll get back the portion I just sold at higher (but "safer") prices. (Click to enlarge)

Disclosure: Long Dr. Reddy's Laboratories in fund; no personal position

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Source: Why I'm Cutting Back My Dr. Reddy's Position