Today’s pick is DRREDDY [stockquote]DRREDDY[/stockquote]. The stock started the year with an up-move to Rs. 1,800 levels. After experiencing resistance at those levels, the stock started its move down. It then saw head-and-shoulders bottom formation during May to July, and since then it has been on an up-trend. It saw the 52 weeks high of Rs. 1,970 in February, but since then was on a down-trend to find support on the trend-line. In the last three months, the stock moved -1% vs. +1 of the Nifty’s.
Oscillator RSI and CMO are in no man’s land. The stock is currently trading in the middle of the Bollinger bands. Short-term technical just saw 4X9 and 4X18 bullish SMA cross-over combined with a Dragonfly bullish Doji yesterday.
DRREDDY has a historical volatility in the narrow range of 0.25 to 0.45. The scrip’s volatility is currently in the lower end of the range.
Given these technicals, we suggest a short-term BUY. A long-term BUY is also suggested based on the support provided by the trend-line. However, it is advisable to have a relaxed trailing stop-losses level to book profits in case of a trend-reversal.