Dr. Reddy is clearly an outperformer among the large cap pharma space and the entire sector is in very strong trending move.
The Ichimoku cloud is a handy tool that assists in counting and confirming neo wave counts. The combine application of Elliott wave and Ichimoku gives more objectivity to a trader.
Below is the chart we published in our monthly report, “The Financial Waves Monthly Update”
Dr.Reddy Weekly chart: (Anticipated as on 8th April 2020)
Dr.Reddy Daily chart:
(Below is the extract of the research from our Monthly report published in April)
Elliott Wave analysis
Dr. Reddy is now moving higher in the form of wave iii of (5) and therefore we are seeing near vertical rise. Prices have actually broken above the channel resistance and can continue to move towards the previous peak. We expect wave (5) to continue atleast towards 4500 levels.
Ichimoku Cloud: We can clearly see that whenever the stock has moved either above or below the Ichimoku cloud there has been months of trending move in that direction. The same can be witnessed even now. Post breaking above prices retested the weekly cloud and is now moving higher in near vertical rise. This is typical to wave iii and so one should use any dips to enter into this stock as long as 3000 levels remain intact on downside for a trending move towards 4500 or higher.
In a nutshell, Dr. Reddy is clearly an outperformer among the large cap pharma space and the entire sector is in very strong trending move. Expect 4500 levels on upside in this stock over near term.
Happened till now – Post recommending the stock prices are moving in line in the direction of our target expectations and we have seen movement even beyond it. On 3rd August it made its new 52 week high near 4670 levels. On Daily chart you can see prices still continue to follow the uptrend above the cloud in the form of wave (v) wherein wave (iii) red seems to unfolding on upside.
By adding detailed Elliott wave counts to the above chart the entire pattern suddenly becomes all the more appealing.
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