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Castle Biosciences (NASDAQ:CSTL) rallied more than 20% after delivering a strong Q3 performance. When analyzed through the lens of the Adhishthana Principles, the stock shows clear signs of momentum building. Here's why the current setup looks promising and what lies ahead.
According to the Adhishthana Principles, stocks typically form a Cakra structure between Phases 4–8. This structure, often resembling a channel with an arc, generally carries bullish implications. The breakout in Phase 9 then kicks off the Himalayan Formation, a period of strong, sustained bullish momentum.
Castle Biosciences is currently in its Phase 8 on the weekly charts. The stock entered its Phase 4 in August 2022, and since then, it has been building a clean Cakra formation, explaining why it has traded within a broad range for the past few years.
Now, as the stock moves through Phase 8, it has rebounded from the lower end of the Cakra and is approaching the upper boundary of the structure, preparing for a cakra breakout.
From here, two likely trajectories can unfold before it transitions into Phase 9 in January 2026:
In both cases, the setup points to further momentum building in the stock.
On the monthly charts, Castle Biosciences is currently in Phase 2. As we highlighted in our recent commentary: Roblox After Earnings: Game On or Game Over? Phase 2 unfolds in two parts: the Sankhya period, marked by consolidation or weakness, and the Buddhi period, characterized by powerful rallies.
Castle is currently in its Sankhya phase and trading as expected. It transitions into the Buddhi period in December 2025, right when bullish momentum is expected to intensify. If that plays out, the case for a premature breakout on the weekly chart will gain even more weight.
For those holding the stock, maintaining bullish positions appears favorable as the true momentum is likely to emerge once the stock breaks above the $35 mark, the upper bound of its Cakra. Investors looking to initiate fresh positions have a good accumulation window through November, using the lower end of the Cakra as a stop-loss.
In either case, the setup suggests one thing clearly, Castle's base is firming up, and soon, the rally could take the throne.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
Posted In: CSTL
