Break out play in Yes Bank - 01 Sep 2013

Jai Ganesha!!

1) Yes Bank is India's newest and one of the fastest growing Private banks in India. In the last few months, the bank is in wrong news for all reasons - spat with ex-promoter's wife, RBI recent tightening measures have further dented the bank's profitability and global turmoil.

2) The stock has corrected by more than 60% in the last 3 months to 215. It has rebounded since then, and now trading at around 240. On looking at the charts for the last 5 days, one may see that stock is entering into narrow range and may consolidate (See fig below. Click to view larger image).

3)  But citing the volatility prevailing in the index as well as Bank Nifty, we are playing on the break-out in the stock. The break-out levels have been identified as 247 Rs on the upside and 236 Rs on the downside (See image below. Click to view larger image).

4) If the stock break-outs above 247 Rs, buy the stock with target levels of Rs. 255 and then 272 Rs. Keep a stop loss at 236 Rs.

5) On the downside, if Yes Bank breaches 236 Rs, sell the stock for target levels of 224 Rs and then 208 Rs. Keep a stop loss at 247 Rs.

Buy Syndicate Bank as it reaches its support zone - 29th July 2013

Syndicate Bank is among India's growing Public Sector Banks. The bank has shown some remarkable growth in the last few quarters and fundamentally, stands at very attractive valuations.

Price Charts

1) Technically, the stock has reached the strong support zone of 84-87 Rs and likely to show some support around it (See Chart below).

2) If it takes the support around this level, then we are likely to see a rebound which can push the stock up till 93 Rs. If that resistance level is breached, then we may see the stock reaching back to 101-103 Rs levels.

Nifty is close to a break out - 24th July 2013

1) Nifty has shown some remarkable progress in the last few sessions, despite adverse economic conditions in Indian economy as RBI tighten noose on financial system to protect currency.

2) Nifty, if corrects from the levels of 6080-6110 on closing basis and breaks 5950 on the downside, can actually then correct further down to 5550-5650 levels as this will confirm the heads & shoulders pattern made by the index (See chart below)

3) Though on the upside, if is able to breach 6190-6210, then can actually move further up to make new highs around 6400-6450. The break out above 6190 is very crucial as this is where the last top has been formed (See Chart below)

4) Amidst such environment, it is advised to buy a bull spread and bear spread strategy for the August series and wait for a breakout till 10th August.

5) Buy 5900 Put and Sell 5600 Put which gives a net outflow of 40 Rs and similarly, Buy 6300 Call and Sell 6500 Call for August series, again leading to net outflow of Rs. 30. The combined net outflow is Rs. 70 which translates to maximum loss of Rs. 3500. 

6) If it corrects, one may exit the bear spread strategy when Nifty reaches 5750. On the inverse, it is goes up, one may exit from bull spread strategy, if Nifty reaches 6420.

Sell Sun Pharma as it shows fatigue signs - 16th July 2013

1) Sun Pharma is India's leading Pharma company in India. The company enjoys the leadership position and demand highest valuations among Pharma stock fraternity.

Price Volume Analysis

2) The stock declined to 970 on June 16th and rebounded since then to close today at 1110 Rs (+14%) without any correction. RSI at around 72 indicates over bought situation (Chart 1)

3) Today though stock has shown fatigues. After making the highs of 1125 Rs today, the stock steadily declined to close at Rs. 1110.

4) Volume has too declined by 23% and Delivery volumes by 30% which also points to consolidation or some correction in the coming days.

5) On the technical charts, the stock shows some support around 1090 Rs and then 1068 Rs.

6) In the midst of it, we may Sell the stock at around 1105-1115 Rs with stop-loss around 1130 and target levels of 1090 and 1068 Rs where support level exists.

7) Derivatives traders can buy 1080 Put and Sell 1060 Put which gives risk to reward ratio of 1:3. As per today's closing price, one may earn maximum profit of Rs. 15 per share and maximum loss exists at 5 Rs per share.