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YES Bank Shares Skyrocket 27% in 3-Days; More Steam Left After the Staggering Rally?

JA Bank stock price today: Shares of private lender Yes Bank have been surging in the last three trading sessions. Share price of Yes Bank opened on the higher side today and then hit a 2-year high of Rs 22.80 apiece on NSE, up about 27 percent from Thursday’s close of Rs 17.75 levels .

The stock recently made headlines after the RBI granted conditional approval to proposed investments by CA Basque Investments and Verventa Holdings. The Central Bank approved each investor with respect to the proposed acquisition by each of them of up to 9.99 percent of the paid-up share capital of the Bank through subscription for shares and warrants on shares of the Bank.

Nagaraj Shetti, technical research analyst at HDFC Securities, said the stock price, according to the weekly time chart, points to the formation of a significant bottom reversal pattern such as a rounding bottom and is currently witnessing an upward breakout of the rounding bottom pattern.

The sharp upward breakout from downward trendline resistance over several months has unfolded on the monthly time frame, he said.

“Volume started to grow during the share price breakout and the weekly and monthly RSI over 14 periods shows a positive indication. The medium term uptrend in YES Bank is likely to continue and the next upside targets will be watched around Rs 25 and the next Rs 31 which could be reached in the next 3-5 months. Any downside correction to Rs 19.50 could be an opportunity to buy from dips in the near term,” Shetti said.

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Pravesh Gour, Senior Technical Analyst, Swastika Investmart noted that shares of YES Bank trade above most moving averages and that the Relative Strength Index (RSI) momentum indicator is also positively balanced. MACD (moving average convergence divergence), on the other hand, supports current strength, he said.

These analysts expect the stock to reach the level of Rs 24 in the near term. On the downside, Rs 17.50 is the strong support during any correction, he said.

However, some analysts remain cautious ahead of the three-year lock-in period of major investors. In March 2020, lenders like Axis Bank, ICICI Bank, Kotak Mahindra Bank and IDFC First Bank had purchased a stake in Yes Bank.

“If you get really excited about Yes Bank and all the things that are happening, remember that the 3-year lock-in for 75% of pre-drama shares expires in March 2023, 3 months from now. Lots of liquidity is coming, and the news will be widely known around the end of February,” Deepak Shenoy, founder and CEO of Capital Mind, said in a tweet.

According to stock market experts, Yes Bank’s shareholder banks would also look at valuations after the three-year lock-in expires. That much will depend on Yes Bank’s Q3FY23 results. If Yes Bank manages to post strong numbers in its Q3FY23 results, then valuations of Yes Bank shares could become attractive and therefore private lenders who purchased a stake in Yes Bank could continue to hold the shares.

Ravi Singhal, CEO of GCL Securities, advised Yes Bank shareholders to keep an eye on Q3FY23 results: “Much will depend on Yes Bank’s results in Q3FY23. If the retail lender manages to deliver attractive numbers like other banks, valuations of Yes Bank shares are expected to become very attractive. As Yes Bank is still following the post-Covid spread for provisions, these provisions are expected to fall like any other bank. Thus, a better quarterly result for the period October to December 2022 may lead to an increase in the share prices of Yes Bank and in that case private banks holding Yes Bank shares may not be allowed to go for profit booking as they have been given the responsibility to manage Yes Bank at a profitable bank. Improved quarterly earnings from Yes Bank are expected to create a new supply zone of Rs 40 to Rs 45 for institutional and retail investors.”

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disclaimer:Disclaimer: The opinions and investment tips of experts in this News18.com report are their own and not those of the website or its management. Users are advised to contact certified experts before making investment decisions.

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