Central Depository Services (India) Ltd Shows Mixed Technical Signals Amid Sideways Momentum

Price Movement and Market Context

On 8 Jan 2026, CDSL closed at ₹1,475.60, up from the previous close of ₹1,457.00, marking a daily increase of 1.28%. The stock traded within a range of ₹1,446.30 to ₹1,479.90 during the session. Despite this short-term uptick, the stock remains well below its 52-week high of ₹1,828.90, though comfortably above its 52-week low of ₹1,047.45. This price action reflects a consolidation phase after a period of volatility.

Comparatively, CDSL has outperformed the Sensex over the past week and year-to-date periods, with a 1W return of 2.22% versus the Sensex’s 0.04%. However, over the one-year horizon, the stock has underperformed significantly, posting a -16.1% return against the Sensex’s 10.26%. Longer-term returns remain robust, with a three-year gain of 164.14% compared to the Sensex’s 46.37%, and a five-year return of 446.32% versus the Sensex’s 84.91%. This disparity highlights the stock’s strong historical growth despite recent headwinds.

Technical Trend Shift: From Mildly Bearish to Sideways

Recent technical analysis indicates that CDSL’s trend has shifted from mildly bearish to sideways. This suggests a pause in the previous downward momentum, with neither bulls nor bears currently dominating. The sideways trend often precedes a decisive move, making it a critical juncture for traders and investors to monitor.

On the daily chart, moving averages have turned mildly bullish, signalling some short-term buying interest. The stock price is currently trading near its short-term moving averages, which may act as support levels. However, weekly and monthly indicators paint a more cautious picture.

MACD and Momentum Indicators

The Moving Average Convergence Divergence (MACD) indicator remains bearish on the weekly chart and mildly bearish on the monthly chart. This suggests that the medium-term momentum is still under pressure, despite short-term gains. The MACD histogram has shown some contraction in negative momentum, but no clear bullish crossover has yet occurred.

The Know Sure Thing (KST) indicator also remains mildly bearish on both weekly and monthly timeframes, reinforcing the view that momentum has not fully recovered. These momentum oscillators indicate that while the stock is not in free fall, it has yet to establish a strong upward trajectory.

Relative Strength Index (RSI) and Bollinger Bands

The RSI readings on both weekly and monthly charts currently show no clear signal, hovering in neutral territory. This lack of overbought or oversold conditions suggests that the stock is consolidating without extreme price pressures.

Bollinger Bands present a mixed scenario: mildly bearish on the weekly timeframe but bullish on the monthly. The weekly mild bearishness indicates some short-term volatility and potential resistance near the upper band, while the monthly bullishness suggests that longer-term volatility is contracting and the stock may be poised for a stabilisation or upward move.

Moving Averages and Volume Analysis

Daily moving averages have turned mildly bullish, indicating that recent price action is gaining some upward traction. The stock is trading close to its short-term moving averages, which may provide support in the near term. However, the weekly On-Balance Volume (OBV) remains mildly bearish, suggesting that volume trends have not fully confirmed the price gains. Monthly OBV shows no clear trend, indicating indecision among market participants.

Dow Theory and Broader Market Signals

According to Dow Theory, there is no clear trend on either the weekly or monthly charts. This absence of a definitive trend aligns with the sideways momentum observed in price action. The lack of confirmation from Dow Theory suggests that investors should remain cautious and watch for a breakout or breakdown to confirm the next directional move.

Mojo Score and Ratings Update

MarketsMOJO has upgraded CDSL’s Mojo Grade from Sell to Hold as of 5 Jan 2026, reflecting the recent technical stabilisation and improved short-term indicators. The current Mojo Score stands at 58.0, indicating a moderate outlook. The Market Cap Grade is 3, signalling a mid-sized capitalisation within the capital markets sector. This upgrade suggests that while the stock is not yet a strong buy, it is no longer in a declining phase and may offer selective opportunities for investors.

Investment Implications and Outlook

CDSL’s mixed technical signals and sideways momentum imply a period of consolidation where investors should exercise caution. The mildly bullish daily moving averages and monthly Bollinger Bands hint at potential stabilisation, but bearish MACD and KST indicators on longer timeframes counsel prudence. The stock’s recent outperformance relative to the Sensex over the short term is encouraging, yet the significant underperformance over the past year highlights ongoing challenges.

Investors may consider monitoring key technical levels, particularly the 52-week high of ₹1,828.90 as a resistance benchmark and the 52-week low of ₹1,047.45 as support. A sustained move above short-term moving averages and a bullish MACD crossover could signal renewed upward momentum. Conversely, failure to hold current support levels may lead to further downside.

Conclusion

Central Depository Services (India) Ltd currently exhibits a complex technical profile characterised by a shift to sideways momentum after a mildly bearish phase. While short-term indicators such as daily moving averages and monthly Bollinger Bands offer some optimism, longer-term momentum oscillators and volume trends remain cautious. The recent upgrade to a Hold rating by MarketsMOJO reflects this balanced outlook.

For investors, the key will be to watch for confirmation of trend direction through technical breakouts or breakdowns. Given the stock’s strong historical returns over three and five years, a return to upward momentum could present attractive opportunities. However, the recent underperformance over the past year and mixed signals warrant a measured approach, favouring risk management and close monitoring of technical developments.

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