Up 80% in 6 months, this stock may still have 5% more upside

Mumbai: Dr Reddy’s stock could potentially gap-up as much as 5 per cent Friday, but witness profit booking thereafter as the stock has already run up 10.6 per cent this week. It hit a life-high of 4,845.55 Thursday. Option sellers of the 4,800 call and put — straddle — have baked in a movement of 5.3 per cent either side for the monthly expiry on September 24.

The company announced post market hours Thursday that it had settled a patent suit in the US for sale of a generic version cancer drug in that market. The short-term range for the stock is 4,546-5,054.

Some market constituents might have anticipated the positive patent news, as Thursday’s traded volume at 84.3 lakh shares was almost 9 times the yearly average traded quantity. The delivery to traded quantity of 8.64 lakh shares was three times the yearly average.


Analysts like Rohit Srivastava of IndiaCharts and Chandan Taparia of Motilal Oswal expect the stock to test the 5,000-mark even as it approaches a technically overbought condition.

The strong long-term support is the previous high of 4,386.6 hit five years ago.