The analyst said sustaining above ₹202 could trigger upside towards ₹208–212.
Federal Bank shares have declined 6% in the past month, and its technical charts suggest that consolidation could be on the cards. However, the analyst sees near-term gains if it sustains above crucial support levels.
SEBI-registered analyst Deepak Pal noted that on its daily chart, Federal Bank recently bounced from the ₹190–192 support zone after a sharp decline. The stock is currently trading near ₹200, facing resistance around the 14 & 20-day Exponential Moving Average (EMA) levels.
Indicators like the Moving Average Convergence Divergence (MACD) are showing early signs of recovery, while its relative strength index (RSI) stands at 45, suggesting a neutral momentum. Sustaining above ₹200–202 could open upside towards ₹208–212 levels, while on the downside, ₹190 remains a crucial support, according to Pal.
What Should Investors Do?
In the short term, consolidation is likely. Pal said that a breakout above ₹202 may lead to a near-term gains as the stock is taking strong support around the 200-day EMA. Immediate support is visible near ₹195, which is acting as a strong base.
Technically and fundamentally, Federal Bank stock appears strong. It has entered a correction phase, but if it sustains above current levels and continues its rally, we may see ₹207–208 levels in the short term, he noted.
Fundamental Watch
Its FY25 financials show a healthy loan growth supported by retail & gold loans and a strong CASA ratio improving the liability profile. Asset quality remains under control, with the gross non-performing assets (GNPA) below 2.5%. Pal also highlighted that the stock was trading at reasonable P/B levels compared to peers, making it attractive for long-term investors.
He believes that its strong digital adoption in retail banking, growing customer base in southern India and NRIs, and consistent dividend payout track record augur well for the stock.
Pal cautioned that regulatory compliance & asset quality remain key watch factors going ahead.
What Is The Retail Mood?
Data on Stocktwits shows that retail sentiment turned ‘bullish’ a day ago on this counter.
Federal Bank shares are flattish for the year so far.
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