Support Levels for Yes Bank Stocks: Analysis and Forecast

Investors are often concerned about the support and resistance levels when trading stocks. In the case of Yes Bank, recent market dynamics have presented some interesting patterns and potential support and resistance points.

Short-Term Support and Resistance Levels

For short-term trading, I had previously engaged in trades on June 20 and 21. My analysis was based on derivative data, specifically the open interest at key price levels. I observed a high open interest at both Rs.100 and Rs.120, indicating these levels as potential support and resistance.

Given this, I was confident that the stock price of Yes Bank would not dip below Rs.100 and would not exceed Rs.120. This was a two-tiered support and resistance level, with Rs.100 acting as a near-term support and Rs.120 as a moderate resistance level.

Key Support Levels

However, it's important to note that support levels can sometimes be meaningless. When market conditions become extremely volatile, established support and resistance levels can be broken. This was evident in Yes Bank's recent performance, where it repeatedly broke support levels before settling at Rs.100, the level from which it surged in 2014.

I believe this level of Rs.100 to be a major support, and the stock's rebound from this point is a clear indication of its resilience. For a long-term outlook, purchasing Yes Bank may not be advisable due to ongoing market uncertainties.

Current Support and Further Decline Risks

Recently, the stock has shown some resilience, bouncing back from the Rs.99 level on Thursday. Although it dropped by 4 percent the same day, the large volumes traded at this level suggest potential buying pressure.

However, it's crucial to recognize the possibility of further decline. I originally expected the stock to reach Rs.120, and while it did reach that level, it did not stay there and further descended to Rs.100. This could signal a trend towards a more significant downtrend, possibly reaching levels close to Rs.80 or even lower, as the stock continues to fall.

Fundamentals and Long-Term Outlook

The current market sentiment is against Yes Bank, as indicated by the potential decline in the Nifty 50 index towards 11,400. The current market capitalization (CMP) of Yes Bank is at Rs.11,724. It's important to understand that the stock's performance could be further influenced by broader market indicators.

In the long term, the psychological support level of Rs.100 could hold, but a significant breach of this level could lead the stock to a five-year low, with strong support at the Rs.60 level.

Conclusion

Yes Bank's stock is showing a complex pattern, with volatility remaining high. Retail investors, in particular, might be holding onto the stock despite worsening conditions, as the stock does not provide a clear path to sustained upward movement yet.

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Thank you for reading.