CDSL shares: Choice recommends 'Buy', cites positive momentum

Choice Equity Broking has issued a bullish call on Central Depository Services (India) Ltd (CDSL), recommending a 'Buy' at Rs 1,624 level with a stop loss of Rs 1,520 and a target price of Rs 1,832.

The domestic brokerage noted that CDSL's stock has shown a strong rebound from its key trendline support, aligning closely with the 200-day exponential moving average (EMA) -- a zone where demand had previously emerged.

The stock is currently forming an Ascending Triangle pattern, suggesting the potential for an upside breakout as it consolidates near its upper resistance levels with increasing momentum and volume participation.

Choice highlighted that such formations often indicate accumulation phases and renewed bullish sentiment among investors. The firm believes this technical setup offers a high-probability entry point for investors, supported by a favourable price structure and consistent trading volumes.

Technically, CDSL is trading above its 20-, 50-day and 200-day EMAs, which, according to the report, confirms a well-established uptrend. The brokerage added that a decisive breakout and close above Rs 1,650 could further strengthen the stock's positive momentum. On the downside, the 200-day EMA continues to act as a strong support level, underscoring the presence of buying interest at lower prices.

Momentum indicators also support this bullish view. The Relative Strength Index (RSI) is currently at 64 and trending upward, reflecting sustained strength and signalling the continuation of the existing bullish phase.

Meanwhile, CDSL shares settled 3.32 per cent higher at Rs 1,654 on Wednesday.