Dr Reddy’s Lab Stock Is Technically Challenged – 7/25/2016

Dr Reddy’s Lab Stock Is Technically Challenged – 7/25/2016

India’s one of the biggest drug maker is going to release quarterly results soon and its stock is already feeling the jitters.  Analysts  and news papers will annotate the appropriate headline but someone who is aware about the technicals will of course be taking profit at this levels.   A solid up trend from the beginning of 2009 is still in effect but it is going to be challenged soon.  Sock price is random but they usually don’t stop at random points which you can surmise by looking that attached charts.  Even a huge drop from 4400 stopped at 2800.  Well, that is not a coincidence for sure.  Good stocks should always be traded with long bias and long side is more rewarding in long term for stocks !  But nothing wrong in taking profit time to time when you feel that the run has enough.  We have been actively trading Dr Reddy with amalgamation of stocks, options and futures. So right now we have deployed our favorite strategy of selling covered calls on long positions.

After Dr Reddy’s quarterly result release tomorrow,  following levels are going to be very interesting and this is how we are planning to trade it.

Near 4000 / 4200 resistance – Covered call selling on most positions with liquidation of stocks too.  And probably switch to short side by buying puts.

3200 / 3000 support – cover existing covered calls and trading it from buy side.

Indian pharma trade is very simple.  Buy when FDA helps us to get it with bargain and sell when all is good and stock starts sputter at lofty heights.

Our other recent pharma trade, Cipla Limited longs are looking very promising and we may add to the position during dips targeting 560 / 600

Follow us on Twitter @Bombay_Bulls for trade updates.

DRREDDY_Monthly_Chart_July_25_2016

DRREDDY_Monthly_Chart_July_25_2016

DRREDDY_Weekly_Chart_July_25_2016

DRREDDY_Weekly_Chart_July_25_2016