Chart Check: What does annual chart suggest for DRL? Upside likely to continue in next 1-2 years

pharma space, has rallied more than 10% in a month to hit a fresh 52-week high but the rally may not be over yet, suggest experts. The pharma stock hit a 52-week high of Rs 5176 on 3rd July 2023 and the rally could extend to 5400 levels in the next 1-2 years based on yearly charts, suggest experts. Pharma stocks are moving in tandem with the momentum seen in the sector.

Long-term investors can look to accumulate the stock on declines, they say. The stock rose more than 10% in a month and more than 20% in the last 6 months. The recent momentum has pushed the stock into an overbought zone; hence, some consolidation cannot be ruled out.

The daily Relative Strength Index (RSI) is placed at 71.6. RSI above 70 is considered overbought. This implies that the stock may show a pullback.

MACD, short for moving average convergence/divergence indicator is above its center and signal line, this is a bullish indicator, Trendlyne data showed. After considerable underperformance, the Pharma sector’s health has started to improve. After a 20% decline in 20 months, the stock has found its feet at key technical supports like the horizontal support line, lower arm of the falling channel, moving average, and 38.2% Fibonacci retracement level.

From the support level, the index has risen almost 15% in the last 4 months. The index has given a breakout from the falling channel which is a bullish continuation sign. “Within the Pharma space, DrReddy has a readable technical pattern.