Welcome back to the blog! In today’s post, we’ll revisit CDSL a stock that recently made headlines after jumping nearly 10% in a single day. If you’ve been following the market, you’ll remember that just five days ago, we discussed a “cup and handle” pattern forming on CDSL’s chart. That target has now been achieved. So, what lies ahead?
Let’s dive into an updated technical and fundamental discussion—not just on CDSL but also a quick glance at CAMS, another critical depository service provider in the Indian financial ecosystem.
What Just Happened with CDSL?
CDSL (Central Depository Services Limited) saw a sudden 10% rally, which pushed it closer to its previous pattern-based price targets. While we don’t provide buy or sell recommendations, we had previously discussed the possibility of a strong upward move based on chart patterns—and that played out.
CDSL has rallied more than 50% in just the past three months, which is a massive gain for any stock in a relatively short time frame. So the big question is: What should you do now?
Quick Refresher: What Does CDSL Do?
CDSL is one of India’s two main depositories (the other being NSDL), responsible for maintaining demat accounts and facilitating securities settlement. Apart from its core business, it also earns from:
- Annual maintenance charges from listed companies
- KYC processing
- Other transaction-related services
CDSL holds 65% of India’s market share in the depository space, compared to NSDL’s 35%. This makes it a quasi-monopoly and a favorite among long-term investors.
What’s Next for CDSL? Is It Time to Buy or Wait?
As the short-term cup and handle target has been achieved, the stock may now:
- Consolidate sideways for a while
- Retest some support levels
- Or, if the broader market rallies again, continue moving upward
There are no guarantees in the market. What we see is probability-based behavior, not certainty. But here’s what history and price action suggest:
- When the broader indices like Nifty 50 rally, strong momentum stocks like CDSL tend to outperform
- Stocks with solid fundamentals and market dominance generally revisit all-time highs—and sometimes go beyond
CDSL is currently around 17–18% below its all-time high. That’s the potential upside if momentum continues. However, always base your decisions on your own study.
Important Note: This Is Not Investment Advice
We’re not offering a buy/sell signal. Please don’t act based on hype or recent moves alone. Many investors see a 10% single-day gain and blindly jump in—but that’s risky.
Always ask yourself:
- What is the business?
- Why am I entering?
- What’s the time frame?
- What’s my stop-loss and target?
If you can’t answer these questions, consider learning technical analysis or fundamental research before entering such trades.
A Quick Look at CAMS: Another Market Backbone
Just like CDSL plays a key role in stocks, CAMS (Computer Age Management Services) plays a vital role in managing mutual funds.
Recently, CAMS has also shown a 33–35% move from its lows. On the same day CDSL jumped 10%, CAMS also surged by nearly 4.5%, signaling similar momentum.
- CAMS is down about 22% from its all-time high
- If it revisits its peak, there’s about 28% upside potential
Interestingly, CAMS also appears to be forming a cup and handle pattern, indicating a possible breakout if price action supports it.
Final Thoughts & Learning Points
- Momentum stocks like CDSL and CAMS often move ahead of the broader market when sentiment turns positive.
- Don’t buy a stock just because it moved up 10%. That’s often when FOMO (Fear of Missing Out) kicks in.
- Study the stock, learn about chart patterns like cup and handle, and understand the fundamentals.
- Avoid tips and random stock calls—what worked for someone else may not work for you.
The real money is made when you develop conviction in your trades—and that comes from knowledge, practice, and patience.
Thanks for Reading!
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📌 This is not a recommendation. Please consult a registered financial advisor before making any investment decisions.
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