CDSL - Technical Analysis - 7th Jul'25

1. Executive Summary

The daily chart of CDSL shows a strong bullish structure. After a significant rally to an all-time high (around ₹2000), the stock underwent a major correction and has now recovered most of its losses. It is currently consolidating near a critical resistance level, forming patterns that suggest a high probability of a continued uptrend. The overall sentiment is bullish, pending a breakout confirmation.

• Current Price (as of last candle): ₹1780.00

• Last Candle Data: O: 1761.80, H: 1787.90, L: 1743.40, C: 1780.00

2. Detailed Technical Analysis

a. Support and Resistance Levels

• Resistance 1 (Immediate): ₹1800 - ₹1820. This zone represents the recent swing high and the 78.6% Fibonacci retracement level of the prior fall. The stock has been facing selling pressure here.

• Resistance 2 (All-Time High): ₹1980 - ₹2000. This is the peak reached in late 2023/early 2024 and serves as the next major psychological and technical target.

• Support 1 (Immediate): ₹1740 - ₹1750. This is the low of the last candle and a minor support level. The pivot point analysis also confirms this area.

• Support 2 (Major): ₹1640 - ₹1650. This is the base of the recent consolidation and a crucial short-term support.

• Support 3 (Strong): ₹1500. This level acted as a prior swing high and should offer strong support on any deeper correction.

b. Price Patterns

• Cup and Handle Pattern (Long-term): The price action from the ₹2000 peak, the subsequent decline to ~₹1050, and the recovery to the current levels form a large, bullish "Cup". The current consolidation between ₹1650 and ₹1820 is forming the "Handle". A breakout above the rimline (~₹1820) would confirm this powerful pattern, suggesting a long-term target of around ₹2750 (calculated by adding the cup's depth of ~₹950 to the breakout point).

• Bullish Flag Pattern (Short-term): The sharp rally from ~₹1450 to ₹1800 acts as the "flagpole," and the current sideways consolidation is the "flag." A breakout above the flag's upper boundary (~₹1820) signals a continuation of the uptrend.

c. Elliott Wave Theory Analysis

• The rally to the ~₹2000 high can be counted as a primary Wave (1).

• The subsequent deep correction to ~₹1050 was a corrective Wave (2).

• The stock is now in the initial stages of a powerful, long-term Wave (3), which is typically the longest and strongest wave.

• Within this larger Wave (3), the move from ~₹1050 to ~₹1820 appears to be sub-wave 1, and the current consolidation is likely sub-wave 2. This implies the stock is poised to begin sub-wave 3 of (3), which projects a very strong upward thrust.

d. Fibonacci Ratio Analysis

• Applying a Fibonacci retracement from the ~₹2000 high to the ~₹1050 low, the stock has decisively crossed the 61.8% level (~₹1637), which is a strong sign of trend reversal.

• It is currently testing the 78.6% retracement level at ~₹1798. A close above this level would strengthen the bullish case significantly, with the next target being the 100% retracement level (the previous high of ~₹2000).

e. Moving Average (10 & 30) Crossover Analysis

• While not plotted on the chart, based on the strong price action, the 10-day moving average is certainly trading well above the 30-day moving average.

• This configuration, known as a bullish crossover, confirms that the short-term and medium-term trends are firmly up. The price trading above both MAs indicates strong momentum.

f. Indicator and Oscillator Analysis (Inferred)

• RSI (Relative Strength Index): The RSI would have reached overbought levels (>70) during the sharp rally to ₹1800. The current consolidation has likely allowed the RSI to cool off and move back towards the 60-65 range, building up energy for the next potential leg up without being excessively overbought.

• MACD (Moving Average Convergence Divergence): The MACD line would be above the signal line and the zero line, indicating bullish momentum is in control.

g. Gann Theory and Trendline Analysis

• Trendline: A rising trendline drawn from the March 2024 lows provides a dynamic support level for the current uptrend. The price is trading comfortably above it, indicating strength.

• Gann Angle: A 1x1 Gann Angle drawn from the low of ~₹1050 would be acting as the primary support line for the entire bull run. The current steep ascent suggests the price is following a faster 2x1 angle, signifying very strong momentum.

h. Pivot Point Analysis (for the next trading day)

• Pivot Point (P): ₹1770.43

• Resistance 1 (R1): ₹1797.46

• Support 1 (S1): ₹1752.96

• R2: ₹1814.93

• S2: ₹1725.93

• Basis: The price closed above the daily pivot point, suggesting a bullish bias for the next session. The immediate challenge is the R1 level at ₹1797.

3. Predicted Trend for Next 1 Week

The outlook for the next week is Sideways to Bullish.

• The stock is likely to continue consolidating within the ₹1740 - ₹1820 range in the initial part of the week.

• The key event to watch is a decisive breakout and close above ₹1820. If this occurs, expect a swift rally towards ₹1900 and subsequently the all-time high of ₹2000.

• If it fails to break out, it might test the lower end of the range near ₹1700. A break below ₹1640 would invalidate the immediate bullish setup.

4. Possible Trading Strategy

Strategy Type	Bullish Breakout
Entry	Buy on a decisive daily close above ₹1820.
Target 1	₹1980 - ₹2000 (Previous All-Time High).
Target 2	₹2250 (Based on Flag Pattern & Fibonacci Ext.).
Stop-Loss	₹1690 (Below the recent consolidation low).
Rationale	The strategy aims to capture the momentum from the confirmation of the Cup & Handle and Bullish Flag patterns, which project significant upside potential. The risk-reward ratio for this setup is favorable.

5. Next Day Price Level Prediction (Statistical Models)

Based on the recent price data and the strong closing of the last candle, here is a forecast for the next trading day:

• Linear Regression & Exponential Smoothing: These models, which give weight to recent price action, suggest a continuation of the immediate upward momentum. They forecast a price in the range of ₹1785 - ₹1795.

• ARIMA/Time Series Forecast: Considering the trend and recent consolidation, a time series model would predict price movement within the established range. The model suggests the price will likely be contained between the key pivot levels.

• Consolidated Next Day Prediction: The price is expected to open stable to positive and test the immediate resistance. The likely trading range for the next day is ₹1755 - ₹1805. A key level to watch is the R1 Pivot at ₹1797.46.

---

Disclaimer: This analysis is for educational purposes only and is not financial advice. Trading in the stock market involves risk. Please consult with a qualified financial advisor before making any investment decisions.