Namaste!
RBL Bank has been fell hard, since the change of CEO, correcting about 90% from the all time highs.
According to me, there can be 2 main reasons:-
1. The Market is wondering if the CEO is a idle choice. RBL Bank is a private sector bank, and CEO came from a Public Sector bank.
2. The market is also thinking if this could be next Yes Bank. But, this is a complete different scenario than Yes Bank. You see, in any bank, NPAs are a crucial factor to consider. If there are increased or more NPAs, it hits any bank hard.
In the Yes Bank, Mr. Rana and company has given very big loans to some of the big companies. The companies didn't became successful and didn't earned profit. So they defaulted their loans. And it is called NPAs (Non-performing Assets), or you can say a lost money.. Whereas, it is a very different case in the case of RBL bank, except the opportunity cost (if the new CEO takes more and more time to make and run RBL Bank successfully).
Investment:
Q: What is the investment price?
A: If the price moves at or above Rs 96.35
Q: What if it becomes the next Yes Bank?
A: Don't invest more than 10% of your entire capital. And Never sell it at a loss.
Positional:
Q: Can I take it as a positional trade? At what price?
A: At or above Rs 96.35. SL is Rs 82.35.
Q: What is the target.
A: You can do either of the 3 things. a: 3 times your risk amount (Rs 138.35), b: Rs 153, c: Rs 279.
Disclaimer: The analysis I have shared is based on my understanding and experience in the markets. Investment and trading carries an element of financial risk. Please do your analysis and/or consult your financial advisor before investing and trading.
RBL Bank has been fell hard, since the change of CEO, correcting about 90% from the all time highs.
According to me, there can be 2 main reasons:-
1. The Market is wondering if the CEO is a idle choice. RBL Bank is a private sector bank, and CEO came from a Public Sector bank.
2. The market is also thinking if this could be next Yes Bank. But, this is a complete different scenario than Yes Bank. You see, in any bank, NPAs are a crucial factor to consider. If there are increased or more NPAs, it hits any bank hard.
In the Yes Bank, Mr. Rana and company has given very big loans to some of the big companies. The companies didn't became successful and didn't earned profit. So they defaulted their loans. And it is called NPAs (Non-performing Assets), or you can say a lost money.. Whereas, it is a very different case in the case of RBL bank, except the opportunity cost (if the new CEO takes more and more time to make and run RBL Bank successfully).
Investment:
Q: What is the investment price?
A: If the price moves at or above Rs 96.35
Q: What if it becomes the next Yes Bank?
A: Don't invest more than 10% of your entire capital. And Never sell it at a loss.
Positional:
Q: Can I take it as a positional trade? At what price?
A: At or above Rs 96.35. SL is Rs 82.35.
Q: What is the target.
A: You can do either of the 3 things. a: 3 times your risk amount (Rs 138.35), b: Rs 153, c: Rs 279.
Disclaimer: The analysis I have shared is based on my understanding and experience in the markets. Investment and trading carries an element of financial risk. Please do your analysis and/or consult your financial advisor before investing and trading.
Comment:
For positional: The trade will be cancelled, if not executed until the next 4 weekly candles.
Trade active:
Investment as well as Positional trade active.
Comment:
Another area of concern for investors is the fact that the retail loan book is heavy on unsecured loans. Means the sky high inflation will damage RBL Bank more than any other bank, because, the general (retail) people will default loans due to increased cost of living, resulting in more NPAs in the books of RBL Bank.
Comment:
It's EPS has been very inconsistent since last 3 years, this is one of the reasons for the severe fall in stock prices.
Trade closed: target reached:
Target 2 reached, target 3 awaited.
Trade closed manually:
Not waiting for target 3, selling at Rs 235 is a good idea. Please do your own analysis and/or consult your financial advisor before taking any action.
Comment:
I expect anyone who is reading my writings to know that there is nothing "certain" in the markets. Neither the %gain on stock nor "out-performance" or "under-performance". There is a risk and opportunity cost involved in both, buying and selling. Selling at any price can often result in "opportunity loss" when the stock moves higher and higher. Human psychology is a culprit here. For e.g. I post any stock which seems undervalued or overvalued to me on tradingview. When anyone makes money on that, they wont appreciate me "a single word". But when they lose or it results in opportunity loss, they are bound to blame me. I don't criticize any person, because I know their psychology has defeated them. At last, there is nothing like "easy money" in the markets. The survival of the fittest holds absolutely true here.