Yes Bank ... Fallen Angel: To bottom fish or not to bottom fish
Once upon a time, Yes Bank was in my portfolio too. Thankfully I exited the stock when it was above 300. The human mind naturally seeks to bottom fish such fallen angels. Here are some facts you have to consider.
There is yet another Earnings report in 2 days.
There was a massive selling volume of more than 10 times average for 2 continuous days and price closed near the lows. This can be a climatic selling. Though we have to wait for a few more days to confirm a bottom. A simple test for bottom formation can be to wait for at least three days where the low is not breached and preferably a small or big bounce is seen. A more rigorous test will be to wait for the candle high of the bottom to be taken out along with the 3 days rule.
Given the rock bottom state of affairs, it is a laggard and hence will not be on my radar for longs and I will not go short without full hedge as the runway is very small and it can make a sharp u turn anytime. If I were a bottom fisher, I will wait for the price to bounce at least 20% from the new low(to be formed) before I even consider a testing quantity.
There is yet another Earnings report in 2 days.
There was a massive selling volume of more than 10 times average for 2 continuous days and price closed near the lows. This can be a climatic selling. Though we have to wait for a few more days to confirm a bottom. A simple test for bottom formation can be to wait for at least three days where the low is not breached and preferably a small or big bounce is seen. A more rigorous test will be to wait for the candle high of the bottom to be taken out along with the 3 days rule.
Given the rock bottom state of affairs, it is a laggard and hence will not be on my radar for longs and I will not go short without full hedge as the runway is very small and it can make a sharp u turn anytime. If I were a bottom fisher, I will wait for the price to bounce at least 20% from the new low(to be formed) before I even consider a testing quantity.
Comment:
Interestingly on the very next day there was a billion plus shares of yes bank traded and price has moved up on above average volumes.