What is your take on Investment in Yes Bank

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What is your take on Investment in Yes Bank

Friends, today we will discuss everyone’s favorite bank i.e. Yes Bank (NS:). As we know and tracking of this bank it has rapidly fallen from the levels of 280-250 to 50-40 due to back to back bad news. This stock is F&O listed and big players never miss the opportunities in bad news stock. I think that is the main reason big players have made money and long term investors got panicked. The stock had strong support around 45 and shown bounce from the same. At the same time, Indian Warren Buffet (Mr. Rakesh Jhunjhunwala) has bought Yes Bank and the quantity was around 19.5 lac. Now the big question is “Is this right time to invest in Yes Bank?”.

Daily Chart: On 05th March, news has come out i.e. SBI (NS:) Bank is going to take over Yes Bank and because of this stock has shown a gain of 25% in a day. This spike has given confirmation of the Trend Line breakout. The next day due to market sentiment or bad news stock has shown a fall of 51% in a day. One day breakout and next day breakdown, whats going on. The current market is totally unpredictable and it is totally working only on sentiments plus global market.

Weekly Chart: If we see weekly closing then Bullish Harami pattern has confirmed on the chart. However, there is strong resistance around 28-29 and stock need to cross & close above this level. As per RSI, the stock is oversold for many weeks.

Monthly Chart: On the day of 51% fall, the stock has given bounce from the levels of 6/7. The reason was monthly support and as we know “After a big fall recovery should happen”. If monthly closing comes above 45 then trend can change.

Fundamental: If we see basic fundamental then data is mix and match.

Pros

  • Stock is trading at 0.24 times its book value.
  • Company has been maintaining a healthy dividend payout of 19.39%

Cons

  • Promoter holding has decreased by -11.44% over last quarter
  • Promoter holding is low: 8.34%

The company has a low return on equity of 13.63% for the last 3 years.
If we see net profit then last year was too bad. Now we have to wait for this year’s results.

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