YES Bank stock rises 24% in a month; is it a value pick or momentum trap?

Shares of private sector lender YES Bank have surged 24% in a month leaving investors guessing whether the banking stock is a value buy or a momentum trap. The stock, which closed at Rs 15.94 on October 27, 2023 was trading at Rs 19.83 in Tuesday’s session. The stock ended at Rs 19.79 on Friday.

In the current session, the banking stock was trading flat at Rs 19.89 on BSE. Stock of YES Bank has gained 16 per cent in a year but lost 8 per cent in 2023. In six months, the stock has gained 27.61 per cent. Market cap of the bank stood at Rs 57,200 crore in Tuesday’s trading session. YES Bank has a one-year beta of 0.4, indicating low volatility during the period.

In terms of technicals, the relative strength index (RSI) of the YES Bank stock stands at 62.2, signaling the stock is trading neither in the overbought nor in the oversold zone. YES Bank shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day, 150 day and 200 day moving averages.

Analysts were of the view that the stock closing above the key resistance level of Rs 21 could see more upside in the near term.

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "The stock after the decent rally from 15.90 zone to touch the peak of 21.15 levels has given a short correction to take support near the 19 zone and indicated a pullback to improve the bias. But still a decisive breach above 20.50-21 zone is necessary to carry on the momentum and expect for a breakout for further higher targets 22.50 and 24 levels. As of now, one can maintain the stop loss of 19 and hold on to the stock."

Mehul Kothari, Technical Head at Anand Rathi Shares & Stock Brokers said , “YES Bank has confirmed a range breakout above Rs 19.50 and it is preparing for the higher levels of Rs 22 and Rs 24 in the coming weeks. On the downside, support is placed at Rs 17. Till the time this support is not breached we maintain a buy on dips stance for the stock.”

Mileen Vasudeo, Sr Technical Analyst, Arihant Capital said, "We are observing an accumulation in the range of Rs 18-19 levels on the daily chart of the Yes Bank. At present, the stock is facing strong resistance at Rs 21 levels. Any move above the resistance level would propel the momentum on the upside,"

Abhijeet from Tips2trades said, "YES Bank is sideways to bearish but also overbought on the Daily charts with next resistance at Rs 21.1. Short term traders & investors should be booking profits at current levels as a daily close below support of Rs 19 could lead to a target of Rs 15.8 in the near term. Whereas a daily close above resistance of Rs 21 could lead to an extended target of Rs 23.4 in the near term."

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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