Stock Market: Why Are Brokerages Recommending CDSL?

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CDSL Stock Surges with Strong Bullish Momentum amid Technical and Fundamental Strength

By S JHA

MUMBAI, June 3, 2025 – Central Depository Services (India) Ltd (CDSL) is making waves in the stock market, exhibiting robust bullish momentum driven by solid technical indicators and strong financial fundamentals, according to market analysts and recent trading data.

The stock has caught the attention of both traders and long-term investors, with experts signalling potential for further upside. StockEdge, a leading market analysis platform, highlighted the bullish outlook for CDSL in a recent breakdown. “Bullish momentum is in play. Technical indicators confirm it—more upside likely,” StockEdge stated.

On the daily chart, the stock price is trading above both the 50-day Exponential Moving Average (EMA50) and the 200-day Exponential Moving Average (EMA200), a classic sign of sustained upward momentum. The Relative Strength Index (RSI) has surged above 75, indicating strong momentum, though analysts caution that such levels may also suggest the stock is nearing overbought territory.

Adding to the optimism, Angel Broking noted, “CDSL gained over 10%, with volumes significantly above the 20-day average, confirming a strong technical breakout.” This surge in trading volume underscores growing investor interest and confidence in the stock’s upward trajectory.

Delivery volume trends for May 2025 further reinforce this sentiment. StockEdge reported a delivered quantity of 31.8%, stating, “Higher delivery % = Strong conviction by long-term investors. Not just traders, investors are serious here.” This indicates that a significant portion of the stock is being held by investors with a long-term outlook, a positive sign for stability.

StockEdge’s Momentum Score also paints a promising picture:

1 Month: 72/100 (Green)
3 Month: 87/100 (Green)
6 Month: 58/100 (Yellow)

The strong pickup in the short-term trend, particularly over the three-month period, highlights CDSL’s growing appeal among market participants.

On the financial front, CDSL’s performance for the quarter ending March 2025 reflects a solid growth trend. Net sales reached ₹224.45 crore, with EBITDA at ₹109.38 crore and profit before tax (PBT) at ₹126.37 crore. “The growth trend is solid across both revenue and profits,” StockEdge noted, emphasizing that the company’s fundamentals align with its technical strength.

Market analysts across echoed the bullish sentiment on the CSDL stock. Market analyst, @Surendraanalyst, on X claimed the CSDL stock of the possibility of “Head & Shoulders and Round Bottom breakout, signalling confidence in significant upside potential over the medium to long term.”

StockEdge outlined critical price levels for CDSL, with the next resistance at ₹1664 and a support level at ₹1420. These thresholds will be key for traders and investors to monitor as the stock navigates its current uptrend. A breakout above ₹1664 could pave the way for further gains, while the ₹1420 support level offers a potential cushion against any pullbacks.

CDSL’s stock is firing on all cylinders, with technical indicators like EMA50, EMA200, and RSI > 75 confirming strong bullish momentum, complemented by high trading and delivery volumes. Fundamentally, the company’s growth in net sales, EBITDA, and PBT for March 2025 underscores its financial health. While CDSL continues to attract attention, investors are advised to keep a close eye on the ₹1664 resistance and ₹1420 support levels for potential trading opportunities.

Disclaimer: This article makes no recommendation for buy or sell of shares of any company.

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