Analysis: DRREDDY (RDY)

Today’s pick is DRREDDY DRREDDY 2,537.00 -38.05 (-1.48%). 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.

DRREDDY technical analysis chart

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 correlation chart

DRREDDY’s average correlation with the Nifty is 0.34 is positive. The scrip will be replicating the movement of Nifty. NIFTYBEES 672.00 -4.64 (-0.69%)

DRREDDY volatility chart

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.

RDY

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.

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