The pure joy as a technical investor is that via price, volume, chart patterns and a few statistical indicators – it’s great to see market psychology.
Quick Fundamentals / Market Noise:
When I read the news that YES Bank shares were locked in the upper circuit band of 5 per cent at Rs 15.78 on the BSE in August 2020, it sure was an event to check out. The bank said it has paid Rs 35,000 crore, out of the Rs 50,000 crores of Special Liquidity Facility (SLF), that was extended to the bank to make up for any shortfall in deposits during the crisis in March this year. Furthermore, the bank recently raised Rs 15,000 crore through FPO by issuing shares at the price of Rs 12 per share. So is Rs 12 the new floor for the trading price of Yes Bank. Chairman Sunil Mehta also said FY21 will be a year of transition for the bank, which has just come out of an unprecedented Rs10,000 crore bailout led by SBI after setbacks received under the founding team. Mehta said that the new board led by CEO Prashant Kumar was able to restore customer and depositor confidence after the RBI-imposed moratorium was lifted. I mean so much action happened in just a couple of months, it’s worth visiting charts.
First let us check the NIFTY BANK Index to gauge the sector sentiment.
On the monthly the banking sector still seems gloomy as we are yet to recover from the “corona dump”. We shall be in bullish territory if we remain over the 30,500 mark which I am assuming we will, given the strong dovish stance of the RBI now. Key thing to note is that “demonetisation” was the biggest liquidity trigger for banks which led us to 18000 to 32500 in just 3 years. Maybe RBI will print more money than what the entire India deposited in banks in under 60 days during the demonetization days. Time will tell.
Let’s also revisit the market leader in the private banking space, HDFC.
Monthly chart of HDFC feels very top heavy. As we saw in the index, the event of demonetization fuelled in the money for the rally from Dec ’17 to Dec ’19. However since the “Corona dump”, HDFC mirrors what the index reflects. Market ain’t decided yet whether to dump HDFC further, check the long term trendline support. Maybe smart money is still realizing profits from their pre-demonetization holdings. My guess is this year is not the year for HDFC.
But we do have an outlier in this category. Yes you guessed it right, Yes Bank!
Now that we know the summary of events post hating Rana Kapoor as stated at the start of this article, let’s visit Yes Bank chart.
On the monthly, the “Rana Kapoor dump” is much more frightening than the recent “Corona dump”. You can find multiple articles of the chain of event attributing to this on the internet, like this.
Phew, -98%. People must have been shitting bricks. Now let’s look at the chart from a bottom-up approach.
Well what do you know, smart money moves in to buy it at all time now. Need balls to buy fear. The bank recently raised Rs 15,000 crore through FPO by issuing shares at the price of Rs 12 per share. It had stated in its prospectus that the funds raised via FPO will be used for growth and expansion including enhancing its solvency, capital adequacy ratio and evolving regulatory requirements. Do you smell it?
Your last chance to buy was Rs5. If you missed it, you could buy it today at Rs14 something paise / share today. Buy fear, sell panic. The writing is on the wall. Need a degenerate mindset of a trader.
You can compare fractals for all you want. This is the second time Yes Bank has been dumped to its All Time Low (ATL) from its most recent All Time High (ATH), so yeah you can say the stock has maybe developed immunity to this phenomenon.
Volume Profile tells us sell walls in the price range of Rs54-Rs70. Seems like an easy 3x-4x from here, provided you have balls of steel.
See anything you like? Then go make money and let me know your thoughts on email or in the comments below.
Support me in doing more analysis on different stocks or crypto by donation.
Google Pay for Rupees:
Pay me in Bitcoin: