IT stock jumps 5% after board approves increase in buyback price
Stocktwits - Dr. Reddy’s Laboratories Ltd has broken out of a volatility contraction base (VCB) pattern that developed over the past 7–8 months between ₹1,040 and ₹1,300, according to SEBI-registered analyst Rajneesh Sharma.
At the time of writing, shares of Dr. Reddy’s Laboratories were trading at ₹1,351.10, down 0.84% on the day.
Sharma noted that the breakout above the apex zone of ₹1,300–₹1,330 and a horizontal resistance near ₹1,356 was significant, given the prior rejections at those levels.
He cautioned, however, that the weekly Relative Strength Index (RSI) is now entering overbought territory, which may lead to a temporary pause or retest of the breakout zone.
“Breakouts from VCBs with already-elevated RSI tend to see a rest or sideways move before continuation,” Sharma said.
Sharma highlighted the Average True Range (ATR) trailing stop near ₹1,210 as confirmation that the trend is still early, while also warning against emotional chasing.
“A controlled pullback to ₹1,300–₹1,330 could be healthy and offer better positioning,” he said.
For risk mapping, Sharma outlined three possible paths: bullish continuation above ₹1,380, sideways consolidation in the ₹1,330–₹1,380 range, or a structure failure below ₹1,280 if volume turns negative.
He said that the tight coil is broken, the structure is clean, and the volume supports the move, but stressed that confirmation is ongoing.
On Stocktwits, retail sentiment was ‘neutral’ amid ‘normal’ message volume.
The stock has declined 1.4% so far in 2025.