Yes Bank Share Price is Forming a Dangerous Pattern

Jaipur, India, Circa 2020 - A mobile logged into the yes bank mobile application infront of the yes bank board. The background board is brightly lit. The screen shows the mobile application logging in.

Yes Bank (NSE: YESBANK) share price had a remarkable performance in 2022 as the company continued to restructure its operations. The stock surged by more than 60% as it outperformed the Nifty 50 index, which rose by more than 1%. It also crashed other Indian bank stocks like ICICI, HDFC Bank, Kotak Mahindra, and State Bank of India (SBI) among others. So, why did Yes Bank stock rise in 2022 and will the trend continue in 2023?

A wonderful turnaround

Yes Bank has had a remarkable comeback for a company that was on the verge of collapse during the Covid-19 pandemic. In 2020, the company was facing its worst financial crisis, which forced the Reserve Bank of India (RBI) to act. It was suffering from a lack of liquidity, capital, and other financial parameters. 

As a result, the bank was placed under moratorium by the RBI and asked to restructure its finances. At the time, the State Bank of India had expressed interest in investing in the company. The moratorium ended in the same year, giving the bank a new lease of life. 

Yes Bank has made a lot of progress fixing its finances. This culminated in a recent deal that saw the company receive investment from Wall Street titans, Carlyle Group and Advent International. The two companies will hold about 9.9% stake in the company and help the management in turning it around. It also decided to create a bad bank with ₹48,000 crore, which it sold to JC Flowers Asset Management

The most recent catalyst for the Yes Bank share price was the company’s Q3 update. The firm said that its deposits rose to ₹213,608 crore in the December quarter. That was a 16% increase from the previous quarter. The company’s credit-to-deposit ratio dropped to 89.7% while its advances rose to ₹196,826 core. Analysts believe that the bank turnaround will continue in the coming years.

Yes Bank share price forecast

The daily chart shows that the Yes Bank share price has been in a strong comeback in the past few months. After dropping to a low of 17.25 INR on December 26, the stock has recovered to over 22 INR. It remains above the 50-day and 100-day moving averages. However, a closer look shows that the stock is in the process of forming a double-top pattern whose chin is at 17.25. Therefore, at this stage, caution is warranted. Buyers should wait for the stock to rise above the important resistance level at 24 INR. Such a move will see invalidate the bearish view of the of the double-top pattern.

Yes Bank share price