CDSL – Leading Diagonal Kicking Off a Bullish Cycle?

May 20

A possible new bullish impulse may be forming in CDSL, following a strong corrective downtrend.

From the ATH at ₹1989.80, the stock completed a 5-3-5 Zigzag correction that bottomed out at ₹1047.45. The final leg (Wave C) shows the characteristics of an Ending Diagonal, signaling possible exhaustion and the end of the correction.

From that low, the structure that follows appears to be a Leading Diagonal, possibly acting as Wave 1 of a new motive sequence. Despite its expanding nature, Wave 3 is not the shortest, and trendlines are respected — validating the diagonal structure.

This upward move has completed five waves, currently labeled as Wave (1), (2), (3), (4), and (5), which together form a larger Wave (A). If this structure turns out to be impulsive, this may not just be an ABC correction, but the start of a full 5-wave impulse:
1 → 2 → 3 → 4 → 5

Now, we’re likely entering a Wave (2) correction, typically retracing 0.382 to 0.618 of Wave (1). This retracement could break below the diagonal trendline, shaking out late bulls.

Post that, if the structure holds, we may see a strong Wave 3 advance — usually the most powerful leg in any impulse.

This is a hypothesis, and structure confirmation will be key. If price fails to hold support zones or shows structural invalidation, the count will need to be revised accordingly.

Tools Used: Elliott Wave, Fibonacci, Trendlines
Timeframe: 2H

This is not a buy/sell recommendation — purely an educational analysis. Chart will be updated as price action evolves.

May 22

Note

Follow-up Update:
I’ve shared a closer look at the internal structure of Wave (5). So far, the move appears more corrective (A-B-C) than impulsive, with price reacting near the 1.0 Fib extension and upper channel boundary — a zone of likely exhaustion.

That said, structure hasn’t fully broken yet.
If momentum holds, a stretch toward the 1.618 extension remains on the table before any correction.

View the full breakdown here:

May 27

Note

📌 Alternative Count Update – Triangle in Play?

As Elliotticians, we always keep alternate counts in view — because markets love surprises more than we do.

In this updated view, I noticed a potential contracting triangle forming within the current upward trend. While triangles often appear in Wave (B) or Wave (4), in this case, the triangle seems more likely to be part of an internal Wave 4 correction of the white impulse count.

If valid, the entire rally from ₹1047.45 may be unfolding as a 1-2, 1-2 structure within a higher-degree green 1-2-3-4-5 impulse. RSI shows no major bearish divergence — supporting the idea that this triangle is a pause before a breakout.

Interestingly, internal Wave 4 hasn’t yet retraced to 0.236–0.382 of Wave 3, so a brief fake breakdown from the triangle (towards ₹1420–1377) and a sharp reversal would have made more textbook sense.

But markets, as always, don’t care about our textbooks. It now seems like price is itching to launch directly from the tip of the triangle — cheeky move, but technically still valid.

⚠️ Invalidation Level: ₹1378.90
A breakdown below this would put the alternate count on hold, and the previously published structure may resume.

Let’s see which path price chooses. Chart and analysis will be updated as structure unfolds.

Jun 2

Trade closed: target reached

[Update]
Triangle breakout confirmed. Wave 5 and higher-degree Wave (3) targets achieved.
Marking this setup as CLOSED