Central Depository Services (India) Ltd Faces Mixed Technical Signals Amid Price Momentum Shift

Technical Trend Overview and Price Movement

CDSL’s current price stands at ₹1,443.60, slightly up from the previous close of ₹1,433.90. The stock traded within a range of ₹1,435.00 to ₹1,456.00 during the day, remaining well below its 52-week high of ₹1,828.90 but comfortably above the 52-week low of ₹1,047.45. The shift from a mildly bearish to a sideways trend suggests a period of consolidation, where neither buyers nor sellers dominate decisively.

This sideways momentum is critical as it may signal a potential base formation before the next directional move. However, investors should note that the stock’s recent weekly and monthly returns have underperformed the Sensex significantly. Year-to-date and one-year returns for CDSL are both negative at -17.91%, contrasting sharply with the Sensex’s positive 10.51% return over the same periods. This underperformance highlights the challenges the stock faces despite its long-term outperformance over three and five years, where it has delivered returns of 158.87% and 441.59% respectively, compared to the Sensex’s 44.32% and 86.88%.

MACD and Momentum Indicators Signal Caution

The Moving Average Convergence Divergence (MACD) indicator remains bearish on the weekly timeframe and mildly bearish on the monthly chart. This suggests that the stock’s momentum is still skewed towards the downside in the short to medium term. The bearish MACD weekly reading indicates that the recent upward price movement may lack strong conviction, while the mildly bearish monthly MACD hints at a gradual weakening of momentum over a longer horizon.

Complementing this, the Know Sure Thing (KST) oscillator also reflects a mildly bearish stance on both weekly and monthly charts, reinforcing the notion of subdued momentum. The Dow Theory analysis aligns with this view, showing a mildly bearish trend on the weekly scale and no clear trend on the monthly scale, further emphasising the stock’s current indecisiveness.

RSI and Bollinger Bands: Mixed Signals

The Relative Strength Index (RSI) on both weekly and monthly timeframes currently provides no clear signal, hovering in neutral territory. This absence of an overbought or oversold condition suggests that the stock is neither excessively bought nor sold, consistent with the sideways price action observed.

Bollinger Bands present a contrasting picture: bearish on the weekly timeframe but mildly bullish on the monthly. The weekly bearish signal indicates that the stock price is closer to the lower band, implying potential downward pressure or volatility in the short term. Conversely, the mildly bullish monthly Bollinger Bands suggest that over a longer period, the stock may be stabilising and could be poised for a gradual recovery.

Moving Averages and On-Balance Volume Indicate Mild Optimism

On the daily chart, moving averages show a mildly bullish trend, suggesting that short-term price momentum is gaining some traction. This mild bullishness is a positive sign for investors looking for early indications of a trend reversal or a sustained rally. However, the weekly On-Balance Volume (OBV) remains mildly bearish, indicating that volume flow is not strongly supporting the price gains in the short term.

Interestingly, the monthly OBV is mildly bullish, which may imply that longer-term accumulation is taking place despite short-term selling pressure. This divergence between weekly and monthly OBV readings highlights the nuanced market sentiment surrounding CDSL, where institutional investors might be gradually building positions while retail sentiment remains cautious.

Market Capitalisation and Mojo Score Reflect Caution

CDSL’s market capitalisation grade stands at 3, reflecting a mid-tier valuation within its sector. The company’s Mojo Score has recently deteriorated to 42.0, resulting in a downgrade from a Hold to a Sell rating as of 30 December 2025. This downgrade by MarketsMOJO underscores the technical and fundamental challenges the stock currently faces, signalling investors to exercise caution.

The downgrade is consistent with the mixed technical signals and the stock’s underperformance relative to the Sensex in recent months. Investors should weigh these factors carefully, especially given the stock’s volatile price momentum and the absence of strong bullish confirmation from key indicators.

Long-Term Performance and Sector Context

Despite recent setbacks, CDSL’s long-term performance remains impressive. Over three years, the stock has surged by 158.87%, significantly outperforming the Sensex’s 44.32% gain. Over five years, the outperformance is even more pronounced, with CDSL delivering a remarkable 441.59% return compared to the Sensex’s 86.88%. This track record highlights the company’s strong fundamentals and growth potential within the capital markets sector.

However, the recent technical deterioration and sideways momentum suggest that investors should remain vigilant. The capital markets sector itself has experienced volatility amid changing regulatory environments and evolving market dynamics, which may be impacting CDSL’s near-term outlook.

Investor Takeaway

In summary, Central Depository Services (India) Ltd is currently navigating a complex technical landscape. The shift from a mildly bearish to a sideways trend, combined with mixed signals from MACD, RSI, Bollinger Bands, and moving averages, indicates a period of consolidation and uncertainty. The downgrade to a Sell rating by MarketsMOJO further emphasises the need for caution.

Investors should monitor key technical levels and volume trends closely, looking for confirmation of a sustained breakout or breakdown before committing significant capital. Given the stock’s strong long-term fundamentals but recent underperformance, a balanced approach that considers both technical and fundamental factors is advisable.

As always, diversification and comparison with sector peers remain essential to optimise portfolio performance in this evolving market environment.

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