Beware of Yes Bank Stock Movements

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Yes Bank
Image Source Credit: bloomberg.com

Beware of Yes Bank Stock Movements

From the beginning of the month, Yes Bank (NS:) share prices are in the market spotlight because of two reasons – the recent upside surge in the stock value and the crisis that’s unfolding within the company. Despite poor fundamentals, questionable future and significant management problems, the recent Price movements are showing a mixture of positive and negative signs, which is utterly confusing for many Market participants.

On the surface, it may be indifferent, but a deeper look into the Price Action of Yes Bank tells us a different story altogether. From the last few months, all we can see is traps and failed moves! Take a look at the Price Action Analysis on this 1D chart of Yes Bank.

Since September 2019, Yes Bank Stock prices are trading in a Broad range. With closer observation, we can spot multiple traps and failures that took place in the Stock.

Take a look at point no 1 on the chart – In November, shares bounced back sharply after testing the support zone at 28.00 – 30.00. But once it reached 70.00, Buyers failed to push it higher. Professional traders would call this type of Price Action as“CMF Formation”, which is an indication of a failed trend reversal. This simply tells us that buying momentum couldn’t sustain in the stock.

Apart from that, during last month Price action formed a Liquidity trap at the support zone. Most of the traders who took positions at that point got trapped by non-liquid market movements. Also right after the liquidity trap, prices broke through the support zone and quickly reversed back, creating a False Breakout pattern which is nothing but a reflection of failed sellers.

Recently we can see an upside momentum building up in Yes Bank. But given the previous set of failures and traps that took place in the stock, traders need to be patient in taking positions. Instead of jumping into the rallies, it’s better to wait for proper retracements or pullbacks and then structure the trades accordingly. Also one must have a proper risk management plan before taking any positions in Yes Bank.

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