Should You Hold or Book the Profit in Yes Bank Shares?
Recently, I shared an investment recommendation for Yes Bank, advising my followers to purchase around 10.5 rupees per share with a first target of 13.5 rupees. Given the positive performance, I suggested a long-term view for bigger targets, especially considering its current trading price above 10 rupees. However, the situation in the financial market is dynamic, and it's crucial to re-evaluate the potential outcomes and the company's financial health before making any further moves.
Why Consider Selling?
The reasons to consider book profits now are manifold. First, there's a significant gap between the two critical moving averages, indicating that a short-term moving average may not easily cross the medium-term moving average. This suggests that further consolidation is needed at the lower levels before a significant upward movement can be expected. Additionally, the BUY level for the stock is at 14/50; the stock is attempting to cross this level but has failed to do so, which further supports the need for caution.
Short-Term Target and Risk Assessment
Based on my short-term target (2), I recommend a level around 18 rupees. However, it's important to assess the risk and reward before deciding whether to hold the shares or book the profits. If the stock were to achieve this target, it would represent a significant return on investment. However, if you hold, you run the risk of the stock declining, especially with the gap between moving averages and the current stock price near 14/30.
As a general practice, aggressive buying should only be done when the stock closes above 14/50 on a monthly basis, which currently does not seem to be the case. Therefore, selling some shares and re-investing them in dips might be a prudent strategy to manage risk and ensure a steady return on investment.
Immediate Action Required
If you have already experienced a significant gain, such as the 75% increase you've mentioned, it would be wise to take some profits. The share price currently sits around Rs30, which means the investment has already shown a substantial profit. Selling 25,000 shares might be a strategic move to lock in some gains while allowing the remaining shares to continue growing.
For detailed guidance and other investment ideas, follow my space for trade ideas and updates. Keep an eye on indicators like moving averages and company performance to make informed decisions. Remember, the key is to balance risk and reward to ensure long-term success in the stock market.
Takeaway
In conclusion, the decision to hold or book profits in Yes Bank shares should be based on a thorough analysis of market conditions, company performance, and personal risk tolerance. The current market dynamics suggest that it might be wise to take partial profits now to protect gains and reassess the investment at a later date.
Do not miss out on future opportunities by over-extending yourself in one investment. Diversify and manage your portfolio to ensure sustainable growth and stability.