Indian benchmark indices gave up early gains on Wednesday and settled lower on the back of fag-end profit booking during the session. RBI's concerns over sticky inflation dented the sentiments. BSE Sensex dropped 167.71 points or 0.21 per cent, to end the session at 81,467.10. NSE's Nifty50 declined 31.20 points, or 0.12 per cent, to close at 24,981.95 for the day.
Some buzzing pharma stocks including Dr Reddy's Laboratories Ltd, Divi's Laboratories Ltd, Lupin Ltd are likely to remain under the spotlight of traders for the session today. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities has to say on these stocks ahead of Thursday's trading session:
Dr Reddy's Laboratories | Buy | Target Price: Rs 7,500 | Stop Loss: Rs 6,450
Dr Reddy's Labs has undergone a significant correction from the peak of Rs 7,107 and has approached the 100-day SMA and 38.2 per cent Fibonacci retracement from the lows of Rs 5,600 to Rs 7,107 on the daily chart. This has led to a cooling down of the technical indicators placing them towards the oversold territory. The recent price action from these key support levels suggests an early indication of a potential reversal in the upward direction, presenting an opportunity for accumulation with an attractive risk-reward profile. Additionally, the Daily RSI has given a positive crossover further supporting a bullish outlook. Hence, we recommend buying DRREDDY above Rs 6800 with stop loss of Rs 6,450 for the target of Rs 7,500.
Divi's Laboratories | Caution | Resistance: Rs 6,200 | Support: Rs 5,550
Divi's Labs has experienced a rapid ascent, surging from Rs 3450 to a peak of Rs 6,029, aligning with the broader rally in the pharma sectors. Although the trend has smoothly transitioned, it's essential to acknowledge the potential for a cooldown or correction following such a robust rally. In terms of support levels, the base has marginally shifted upwards, now residing around the Rs 5,550 level. Despite recent positive price action, the stock is anticipated to sustain its upward trajectory. However, caution is advised, and investors should prudently manage profits by implementing strict trailing stop-loss measures.
Lupin | Buy | Target Price: Rs 2,480 | Stop Loss: Rs 2,120
Lupin has recently demonstrated a descending trendline breakout after consolidation and is currently trading comfortably above all key moving averages on the daily chart. Daily RSI has given a bullish crossover on the daily chart, reinforcing the breakout. The overall trend appears to be upward and minor upcoming fluctuations will likely provide buyers a favorable environment. Hence, we recommend Buying Lupin on dip around Rs 2,230-2,250, keeping a stop loss of Rs 2,120 for a potential target of Rs 2,480.