Dr. Reddy is clearly an outperformer among the large cap pharma space and the entire sector is in very strong trending move.
The followers of Elliott wave might know the importance of capturing the 3rd wave in the trend. As per Elliott wave theory, wave iii is the strong and sharp in nature and thus from trading perspective quick gains can be made if one is placed in right direction.
Based on the structure of last week we mentioned our bullish tone on Dr. Reddy expecting wave iii on upside. Post the same prices broke out on upside and rallied sharply.
Look at the below chart of Dr.Reddy published in the equity research report on 08th April 2020 morning before markets opened – “The Financial Waves short term update”
Dr. Reddy 60 mins chart: (Anticipated as on 08th April 2020)
Dr. Reddy 60 mins chart: (Happened as of now)
On the hourly chart, we can see prices have rallied on upside post breaking above the channel resistance. As per wave counts we wave the terminated wave c (red) of (ii) on the lower end of the channel which was seen forming Ending diagonal pattern. Currently wave iii of wave (iii) most power wave seems to be unfolding on upside.
In short, Dr. Reddy seems to be at positive. Buy on dips would be ideal strategy to enjoy the ride on upside. This is valid as long as 3210 stays intact for short term move towards 3800 or higher levels.
Happened: Dr. Reddy precisely moved as expected and as per direction of wave counts which pointed on upside in the form of wave iii. It made its new 52 week high near 3856 levels.
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