IDFC First Bank, AU Small Finance Bank: How do these stocks look on charts?

Drumil Vithlani, Technical Analyst at Bonanza, decodes trading strategy in IDFC First Bank, AU SFB following the recent adverse stock reaction on the NSE.

Stocks in focus: IDFC First Bank and AU Small Finance Bank (AU SFB) trading flat on Tuesday, following the sharp fall in the previous session amid adverse news flow.  On Monday, February 23, IDFC First Bank tanked 16.1 per cent to ₹70.4 after the lender detected a ₹590 crore fraud at one of its Chandigarh branches. The bank identified an incident involving alleged unauthorised and fraudulent activities by certain employees at a Chandigarh branch.  Meanwhile, AU SFB shed 5.4 per cent at ₹974 after the Haryana government on Sunday issued a circular, stating that all government bank accounts held with AU Small Finance Bank in the state would be de-empanelled with immediate effect. 

Here's fundamental analysts' view on IDFC First Bank and AU SFB

  Brokerages have cut earnings estimate for IDFC First Bank following the fraud incident. Emkay Global has trimmed its earnings estimates and target price, citing potential near-term pressure on deposits and margins.  The brokerage cut its FY26, FY27 and FY28 earnings estimates by 30 per cent, 13 per cent and 9 per cent, respectively. READ MORE  Meanwhile, analysts believe the primary concern for AU SFB is reputation, not liquidity.  "De-empanelment could trigger a "trust deficit" among other institutional and state clients, potentially hampering future deposit mobilisation and fee-based income," said Sameer Sawant, research analyst at Mirae Asset Sharekhan. READ MORE 

Technical outlook on IDFC First Bank and AU SFB

  IDFC First Bank stock broke below its crucial support zone of ₹77 – ₹78 with strong volume, signalling a shift in trend from bullish to bearish, says Drumil Vithlani, Technical Analyst at Bonanza. 

 

 

  "The stock is now trading below all major exponential moving averages — 20, 50, 100, and 200 EMAs - confirming both short-term and long-term weakness," explains Vithlani.  The analyst further adds that the RSI at 23.83, is significantly below its 14-period average of 48.59, indicating oversold conditions following heavy selling pressure.  Vithlani sees immediate support for IDFC First Bank stock near the recent low around ₹66 – ₹67, a level tested multiple times previously; Key resistance is now seen at ₹77.  For AU SFB, the analyst from Bonanza believes the stock is currently trading in a consolidation zone. However, the stock recently broke below its short-term exponential moving averages of 20 and 50, indicating emerging short-term bearishness. 

 

  Vithlani sees immediate support for the stock near ₹935, and resistance around ₹1,030.  "The RSI stands at 41.26, below its 14-period average of 54.28, suggesting weakening momentum and continued bearish bias. Fresh positions should be avoided at current levels. Existing holders are advised to maintain a strict stop-loss at ₹935 to manage downside risk," says the analyst.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.