Technical analysts shared cautious advice on Central Depository Services Limited (CDSL) despite seeing the stock go up to ₹3,400. 

What Happened: Shares of CDSL have risen 10% in the last month. CDSL reported an 82% rise in net profit to ₹134.20 crore in the June quarter, while revenue jumped 72% to ₹257.38 crore.

The company also recently announced the record date for its 1:1 bonus share issuance, which will give each investor one share for every share they hold in the company on August 24. 

Technical Views: Rupak De, senior technical analyst, LKP Securities said, "The stock is in a higher high, higher low formation, indicating a bullish setup. The trend is likely to remain intact unless the stock falls below 2300. Although the stock is in an uptrend, it appears somewhat overpriced, so buying on dips could be a good strategy for entry. Over the medium term, the stock might move towards 2900/3400, with support seen at 2300."

See Also: Nuvama Maintains ‘Buy’ Call For Texmaco Rail, Sees 35% Upside

Jigar Patel, senior manager, technical research analyst at Anand Rathi Shares and Stock Brokers said, "At the current market level, CDSL ‘s stock is trading significantly above its major key exponential moving averages (DEMA) for the 21-day, 50-day,100-day & 200day periods. This situation indicates that the stock has experienced a strong upward momentum recently. However, trading far above these critical averages can often make the stock vulnerable to a pullback, as it suggests that the price might be overextended or overbought in the short term.”

“While CDSL may continue to rise and potentially reach the 2700-2750 range in the coming sessions, this level is seen as a strong resistance zone. Therefore, it is advisable for investors to consider booking profits if the stock enters this price range, rather than taking aggressive long positions. The strategy here is to lock in gains while the stock is near its potential peak, reducing the risk of losses if the anticipated pullback occurs”, Patel added.

Price Action: Shares of CDSL were up 2.72% to ₹2,630.30 on Friday. 

Read Next: ‘Sell’ Mazdock Shares Say Brokerages, See Up To 70% Slide Ahead