Yes Bank Share Price Builds Upside Momentum

Summary:
• India's Yes Bank hit an all-time-high this year, and recent news around the company could build upward momentum to have another go.

Yes Bank shares rose by 0.41% on Tuesday to Rs 24.55, as investors continued to digest news of a single trust investment of Rs 366 crore. YESBANK has been trading sideways since March 15^th, but the news saw it break out to the upside following a gain of 5.39% on Monday.  However, the bank’s upside in the stock market is likely to be curtailed by news of a tax demand notice from the Income Tax Department of the National Faceless Assessment Unit.

In the latest news, Yes Bank revealed in its exchange filing on March 30^th that the Rs 366 crore injection came following the sale of its NPA Portfolio.  Also, the bank announced two weeks ago the completion of the sale of its stressed loan exposure in Katerra India Private Limited to Prudent ARC. This transaction saw Yes Bank receive Rs 203.40 crore.  Also, the bank has introduced surcharges on utility transactions beginning May 1^st, to prevent misuse.

Bubbling under YESBANK upside outlook in the medium term is the potential $8-$9 billion sale of 51% of the bank’s stake. While the potential buyers are yet to present a bid, the sentiment surrounding the potential sale will likely see investors position themselves for a potential takeover. YESBANK shares are about 24% from its all-time highs recorded in February 2024, signifying that the momentum on the downtrend has been relatively strong over the past two months.  That said, the shares have risen by about 7.2% since mid-March, providing strong support for the upside.

Technical analysis

YESBANK is on an upside momentum, as shown by the RSI indicator. The pivot is at 24.15, and the buyers will need to maintain control above this mark to maintain the upside. If the upward momentum breaks the resistance at 24.75, the next target will likely move up to test 25.05. On the other hand, a move below 24.15 will put the sellers in control, with the support at 23.75 in sight. However, a continuation of control, by the sellers at that mark will likely break the first support, and possibly test 23.35.