Missed Dr. Reddy's 37% Surge? Time Cycle and Elliott Wave Made It Possible!
Oct 11, 2023
Missed Dr. Reddy's 37% Surge? Time Cycle and Elliott Wave Made It Possible!
Pharma sector continued to outperform and we have been Bang on in anticipating up move in Dr Reddy.
We published detailed research on Dr Reddy on 21st April 2023 and we achieved our target level as our studies showed.
Below is the chart we published in our monthly report, “The Financial Waves Monthly Update”.
Dr Reddy Weekly Chart: (Anticipated as on 21st April 2023)
Wave analysis as on 21st April 2023
Elliott Wave analysis: Elliott wave is simple 5-3-5 pattern. This stock is moving in a classic impulse pattern. Wherein, primary wave 2 has completed on the downside near 1900 levels. Since then wave 3 is moving on the upside which is considered as a strongest wave. Wave 3 is subdividing in nature and currently intermediate wave iii is moving on the upside.
Indicator Analysis: Prices have given breakout of the consolidation which lasted for more than 2 months. So, we are expecting a good rise from now on. Along with this, prices have bounced back on the upside by taking support of the cloud keeping overall tone positive. Any dip towards the cloud can be used as a buying opportunity. Also, prices have bounced back on the upside by taking support of the lower end of the channel which keeps bias positive. Nearest support can be placed at 4400 levels.
Time Cycle: We have applied Time cycles in order to more mark the important lows and also to get clarity about the direction. Here it has been following 119 period Time cycle very well.
The recent low which was formed on 19th December 2023 was exactly near our cycle which was near 4200 level. Also, cycle has turned on to buy side after breaking swing high of 4640.
So, now, price and time along with Elliott wave all are in sync and suggesting possibility of a good up move in coming sessions.
In a nutshell, Trend for DR Reddy looks positive. Over next few weeks if 4200 remains protected then stock can move towards 5400 or higher. Any breach below 4200 will result into a correction as it will also breach the low of cycle.
Dr Reddy Weekly Chart: (Happened as on 11th October 2023)
Post recommending this stock, prices moved as expected. After a dip, prices broke previous swing high and cycle turned on to buy side. Stock showed a good rally and achieved our target of 5400. We have seen movement even beyond it as prices made high of 5980. Prices from the lows moved more than 37% within less than 6 months of span.
The current rise is in form of iii of 3. For now, one can use buy on dips approach to ride the trend as long as 4900 which is a channel support holds on the downside.