Outlook on Yes Bank applying
Elliott wave, channels and moving averages.
It was in the last week where
majority were bullish as Nifty reached near the psychological level of 9000.
The rise from 8540 to 8966 level was sharp and fast in nature which is enough
to make the euphoria. During such times it is better to calculate the risk
component. The movement of last 4 days is proof of the same that bearing high
risk at the euphoric times can be dangerous. The outperforming stock like Yes
Bank has retraced last 5 weeks of rise in only 2 weeks. When leaders start to
underperform it provides a warning sign.
“The Financial Waves Short Term Update” covers in-depth research on Nifty and 3 stocks on daily basis. We have
shown part of research on Yes Bank taken from the report dated 12th
September 2016.
Yes Bank weekly chart:
Yes Bank 60 mins chart: (Anticipated in the morning of 12th September 2016_
Yes Bank 60 mins chart:
(Happened till now)
(Part of research taken
from 12th September 2016)
Wave analysis:
“In the previous update
on Yes Bank we mentioned that “On downside 1300 is the crucial support. Move
above 1350 will take prices towards 1390 or higher levels.”
Yes Bank continued to
behave as expected. Prices indeed broke the level of 1350 and crossed above
1390 rather quickly. The rise was euphoric and near vertical. But interesting
thing to observe is that after reaching towards the channel resistance we saw
an equally faster opposite move that took out the last segment of rise in
faster time. This clearly highlights the fact that despite of news or event
which is currently ongoing in this stock, the technical resistance levels have
worked very well.
As shown on the weekly
chart, for the first time since the trend started from 740 levels, prices have
decisively broken and closed below the 5 weekly Exponential Moving average. It
is not very often to see such euphoric rise followed by serious capitulation
but it clearly highlights the risk of going long exactly when euphoria was
highest.
Now the last rising
segment has been retraced back equally fast which indicates an important top
might be formed in this stock. For now some pullback cannot be ruled out from
the oversold state but break below 1240 might continue the downtrend further.
As shown on hourly
chart, prices have broken below the important channel support as well and this
was the leader within the banking space which is sending nervous sign going
forward for the entire sector.
In short, medium term
trend for Yes Bank looks to be in danger and any pullback can be only
temporary. Volatility can be high and so one should use prudent stop levels.
1325 can act as short term resistance and move below 1240 will resume the down
move.”
Happened: In
the session of 12th September 2016 itself Yes Bank broke below 1240
and touched the low of 1197 level. Post that consolidation is ongoing. Now what
should be the trading strategy?
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