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Analysis: DRREDDY (RDY)

|Includes:Dr. Reddy's Laboratories Limited (RDY)

Today's pick is DRREDDY (NYSE:RDY). The stock started the year with an uptrend to see the Rs. 1,800 levels. After hovering for a week around the levels it corrected itself to Rs. 1,525 level. Since then the stock has been on an uptrend and it just saw its 52-week's high of Rs.1,927 during last week. In the last three months, the stock has moved +10% vs. +5% of the Nifty's.

Oscillators RSI and CMO are in the over-bought territory suggesting a short-term correction for stock. The stock just experienced a bullish Dragonfly Doji.

The MACD line is moving towards the signal line, accompanied by the falling histogram levels such movement is suggesting a short-term bearish move for the stock. The long-term and short-term GMMA lines are well dispersed and are suggesting a bullish outlook for the scrip.

DRREDDY's average correlation with the Nifty is 0.34 is positive. The scrip will be replicating the movement of Nifty.

DRREDDY has a historical volatility in the range of 0.25 to 0.45. The scrip's volatility currently is in the lower end of the range.

(Source: REUTERS)

Analysts are quite positive about the scrip which is a very good sign for the stock. Traders are advised to keep an eye on the forthcoming results as a drift from the analysts expectation can bring about a drastic change for the stock.

Given these technicals, we suggest a short-term Hold. Also looking at the up-trend in place we suggest a long-term Buy for the script. It will be beneficial to have trailing stop-losses in place, in order to book profits if a trend-reversal were to take place.

The article first appeared on Your Money

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Stocks: RDY