AU Small Finance Bank - Technical Analysis Update and Key LevelsChart Overview:
The price action for AU Small Finance Bank shows it has been moving within a rising channel for the past few years, currently testing key support levels. The bank recently saw a price downgrade from Nomura, which adjusted the target price to ₹670, retaining a neutral rating. This adjustment reflects some cautious sentiment among analysts.
Key Levels and Fibonacci Retracement:
Channel Support - The stock is currently near the lower boundary of the long-term rising channel, a crucial area where it previously found support.
Fibonacci Levels - The stock has pulled back to the 61.8% Fibonacci retracement level around ₹565.65 from its recent highs, which often acts as a strong support level in technical setups. A further breakdown could push it towards the 50% retracement at ₹492.40, a potential next support.
Resistance - On the upside, resistance lies around the upper channel boundary and recent highs near ₹670-₹700, which aligns with Nomura’s target.
MACD Indicator:
The MACD currently shows a weakening momentum on the weekly chart, hinting at possible bearish pressure. A recovery in MACD or a bullish crossover could indicate a return to upward momentum.
RSI Analysis:
The RSI is approaching the oversold region. A bounce from this area might signal potential for reversal if accompanied by strong buying volume.
Conclusion:
AU Small Finance Bank is at a critical support level within a broader uptrend channel. Holding above ₹565-₹570 could lead to a rebound towards the upper end of the channel, with ₹670-₹700 as potential targets. However, if the price fails to hold, watch for the ₹492 level for possible support. The current technical setup suggests caution, especially with Nomura's neutral outlook.
