Published on: December 11, 2023
Yes Bank, a once high-flying stock that witnessed a dramatic fall from grace in 2018, has been a focal point for investors eyeing potential bargains in the market. Priced at a modest Rs.20, the stock has garnered attention for its apparent affordability and few bullish candlestick patterns, but does it warrant a position in your portfolio? Let’s delve into the intricacies of Yes Bank’s recent performance and analyze whether it’s a buy in the current market scenario.
The stock’s journey has been nothing short of tumultuous, plummeting from its peak of Rs.398 in August 2018 to a disheartening low of Rs.5.65 in March 2020. Since then, Yes Bank has been treading water, largely consolidating within the Rs.10-25 range for the past three years.
With benchmark indices reaching unprecedented heights and Yes Bank managing to climb above Rs.20, the question arises – is it the right time to invest?
Enter my proprietary system – Laidback – and its resounding response: NO.
A glance at the weekly chart of Yes Bank, coupled with key indicators such as the Relative Strength Indicator (RSI) and Donchian channel lower line, paints a picture of caution.
Source: TradePoint
The RSI, configured with 100 weeks to gauge strength over the last two years, employs a strategy that signals bullish sentiments when the RSI surpasses the 55 mark.
To learn the Laidback strategy, check our YouTube video on it.
If you are a TradePoint user, we have created a scanner in the software for you to scan the stock every week. I also post the stock list on Forum.
However, the alarming fact is that this strategy has not emitted a bullish signal since 2016, having exited long positions in 2018.
Despite a short-lived rally from Rs.16 to Rs.21, Laidback steadfastly advises against diving into Yes Bank, as indicated by its “avoid” signal.
Investors may be enticed by the seemingly attractive price of Rs.20, but it’s imperative to heed the warnings embedded in the technical indicators. Yes Bank’s inability to trigger a bullish setup according to the Laidback system since 2018 raises red flags about the stock’s potential for sustained growth.
In conclusion, while Yes Bank may be teasingly affordable, it is crucial for investors to exercise caution and thoroughly evaluate the risk-reward dynamics before considering it as a viable investment.
