CDSL gives Inverted Head and Shoulders breakout

The stock of Central Depository Services (India) Limited has given a breakout of Inverted Head and Shoulders pattern on the weekly timeframe. This breakout was confirmed by the more than 50-week average volumes.

The Inverted Head and Shoulders pattern occurs after an extended downward move. It represents a possible exhaustion point in the market, where possible reversal may occur.

Majorly, the stock is displaying a bullish trend, as it is trading above its weekly pivot and short-long term moving averages, that is, 20-day EMA, 50-day EMA, 100-day EMA, and 200-day EMA. The leading indicator, 14-period weekly RSI, is currently quoting at 64.99 and is in the rising trajectory, which suggest a bullish bias. The daily and weekly MACD stays bullish, as it is trading above its zero line and signal line. Moreover, the other volume-based indicators, such as OBV and Money Flow index, are appearing very strong as well.

Going ahead, the stock has immediate support in the zone of Rs 234-230, as the 8-day EMA and 13-day EMA are placed in that region. The most prominent support is placed in the zone of Rs 223-220, as it is the confluence of 50-day EMA and upward sloping trendline support. On the higher side, any sustainable move above the level of Rs 260 is likely to open up gates for further rally towards the levels of Rs 280, followed by Rs 300.