Another stock which is risen nearly 6 times in last five years, Dr Reddy Laboratories Ltd, it currently trading at all time high. So obviously the question arises whether the stock can be bought at this prices, charts are giving a straight no no. We can see the chart above, over last ten years the stock has been moving in a expanding triangle pattern and it seems we are nearing one of the important technical tops in the stock. it can be seen that when ever the stock has touched the upper resistance line, it has just collapsed and corrected 100% of the rise and has fallen all the way to the support line. Currently the stock is nearing the multi year resistance line which it has never been broken successfully, so till it happens we have to assume that the stock is nearing the top especially after a phenomenal rise during last five years. Its better an avoid for the stock at this pint of time as its not going to give any spectacular returns. The technicals are indicating the performance of the stock is not going to be good in coming months or years.

 

M.Sri Mahidar

Trend is Friend.