What Investor/Trader should do with Yes Bank?

What Investor/Trader should do with Yes Bank?

/ By : / Category : Fundamental & Technical Views On Stocks

First of all we will analyse some facts and then will conclude what is my views on this stock.

What happened to Yes Bank: 

Stock was trading at its all time high of around 404 on 20th Aug 2018 and since then it corrected up to 165 due to major reason of RBI actions, offloading of promoter’s stake & many more thereafter. I have captured some data to understand it.

 

     

 

  1. BANK IS  FINDING A SUCCESSOR:

The bank has about three months to decide on the new leader as “The Reserve Bank of India has reaffirmed that a successor to Shri Rana Kapoor, MD & CEO, Yes Bank should be appointed by February 1, 2019,” the lender said in an exchange filing. 

PRESS RELEASE DATED 17 OCT 2018

 
2. Comparison of Shareholding Pattern 
 
Yes bank has reduced its promoters holding by 2.10% over the last three years and by 0.07% on quarter on quarter basis in Sep 2018.
 

Comparison with HDFC Bank

 

Changes in shareholding pattern between Jun 2018 to Sep 2018

 

 

3. Brokerage Views:

Brokerages have their mixed views after the RBI action. 

 

Brokerage Views

 

4. CARE Ratings Places Yes Bank’s Debt Instruments Under Credit Watch

Debt instruments of Yes Bank Ltd. will be closely eyed by Care Ratings after the term of its Chief Executive Officer and Managing Director Rana Kapoor was cut short by the Reserve Bank of India.

The ratings assigned to various debt instruments of Yes Bank have been put on “credit watch with developing implications” on account of the RBI’s action, CARE Ratings said in a press release.

Fundamental Views :

At fundamental front there is no any major changes recently, it is looking ok in compression of leading banks such as HDfC, Kotak, Indusiand..etc. However we can analyse better on Q2 Result of FY2018 which is expected on 25th Oct 2018. There are Pros & Cons as stated below:

Its PE is looking  attractive at current price.

 

 

Technical Views:

CMP on 19th Oct 2018 = 217.90

In last month Sept 2018 stock tumbled up to 165 however it has closed above its major support of 180, which is 100 EDMA on monthly chart. It has bounced from its support but could not closed above its immediate resistance of  260 on daily chart. So technical chart is weak to trade. 

Support-1: 180
Support-2: 160

Resistance-1: 260
Resistance-2: 317

(Note: Whenever price closes below its Support level or closes above its Resistance level then further move in that direction will accelerate. If it does not then it is advisable to accumulate near to support & book the profit near to resistance level.)

 

Monthly Chart

Daily Chart:

 

Conclusion( My Personal View) : 

  1. All the negativity is factored in its current price, however short term trader should avoid this stock as volatility is high.
  2. Investor can accumulate this stock at lower levels periodically as I think stock can bounce once new management will come into play by Feb 2019.
  3. It has a Brand value in the Market.
  4. For trading one can refer above major support & resistance to take their positions accordingly. 

Thanks & Regards

Jagdish Jha

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