CDSL - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.5

📊 Chart Patterns: CDSL is trading below both its 50 DMA (1,562 ₹) and 200 DMA (1,524 ₹), showing short-term weakness. Current price (1,500 ₹) is near support levels, suggesting consolidation after a sharp decline from highs.

📈 Moving Averages: Price < 50 DMA and < 200 DMA → bearish alignment. Trend remains weak until price crosses 1,562–1,524 ₹.

📉 RSI: At 38.3, RSI is in the oversold zone, indicating potential for short-term rebound.

📉 MACD: Negative (-27.6), confirming bearish crossover and weak momentum.

📊 Bollinger Bands: Price near lower band, suggesting oversold conditions and possible mean reversion.

📊 Volume Trends: Current volume (10,15,587) is slightly above 1-week average (9,47,591), showing mild accumulation but not strong breakout activity.

📍 Support & Resistance:

- Strong support: 1,450–1,470 ₹

- Immediate resistance: 1,562 ₹ (50 DMA)

- Major resistance: 1,600–1,620 ₹

🚦 Momentum Signals: Short-term momentum is weak but oversold. Entry zone: 1,470–1,500 ₹ near support. Exit zone: 1,560–1,600 ₹ if resistance is tested.

🔄 Trend Status: The stock is consolidating with bearish bias, oversold but not yet reversing.

Positive

• Debt-free company (Debt-to-equity: 0.00).
• Strong ROCE (46.5%) and ROE (36.3%) indicate excellent capital efficiency.
• Dividend yield of 0.84% provides minor income support.
• EPS of 22.3 ₹ supports valuation comfort.

Limitation

• High P/E (67.4) compared to industry PE (53.3), showing overvaluation.
• PEG ratio of 3.27 suggests expensive valuation relative to growth.
• Stock trading below both 50 DMA and 200 DMA, showing weak technical strength.

Company Negative News

• Quarterly PAT declined to 128 Cr. from 152 Cr. (-25.5% variation).
• FII holdings reduced (-1.36%), showing reduced foreign investor confidence.
• DII holdings also declined (-0.06%), indicating lack of domestic institutional support.

Company Positive News

• Debt-free balance sheet ensures financial stability.
• Strong ROCE and ROE highlight efficient operations despite profit decline.

Industry

• Industry PE at 53.3 is lower than CDSL’s PE (67.4), showing sector trades at premium valuations.
• Depository services industry benefits from rising retail participation in equity markets, though cyclical with market activity.

Conclusion

⚖️ CDSL is consolidating with bearish bias, trading below key moving averages but oversold on RSI. Entry near 1,470–1,500 ₹ could be considered for short-term gains, with exit around 1,560–1,600 ₹. A breakout above 1,620 ₹ would confirm reversal. Strong fundamentals and debt-free status support long-term holding, but near-term weakness due to declining profits and overvaluation persists.