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Yes Bank Share Price Upside Momentum Prevails As Derivatives Trading Looms

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 share price continued its steady ascent, as it gained 3.7 percent to trade at Rs 24.00 in the intraday session on Monday. At the time of writing, YESBANK was on course to register the fourth consecutive winning session, a fete not seen since the year began. This signals a bullishness around the stock, which could set the stage to erase the extensive losses incurred in May. Yes Bank share price lost 12 percent of its value in May, the largest monthly loss since January 2023.  As of this writing, the share price is down by 4.3 percent in June.

The current rally by Yes Bank comes amidst news that the private lender could join 77 other stocks to be included in the Futures and Options (F&0) segment, according to Nuvama Institutional. Futures and Options are derivatives that enable investors to enter into contracts to buy or sell underlying assets. Yes Bank is reportedly likely to qualify for inclusion into the F&0 segment following an impending revision of qualification criteria.

The Securities and Exchange Board of India (SEBI) last revised the rules in 2018. The markets regulator recently announced that it plans to tighten the rules to mitigate against risks such as market manipulation and excessive volatility amidst an explosion in derivatives trading in India in the last year.

Futures and options are popular among investors because they help in locking in predetermined prices of assets, thereby helping them hedge against excessive price swings.  Speculators can also benefit from futures and options trading by betting on price swings on their chosen assets. Furthermore, Arbitrageurs also fancy these derivatives because they enable them to trade on the differences in the prices of assets in different markets.  Therefore, the inclusion of Yes Bank shares in the F&O segment could widen its market by increasing the pool of potential investors.

Technical analysis

The momentum on Yes Bank share price is currently bullish, and calls for further upside, according to the RSI. The share price is likely to pivot at 23.75, from which the next resistance could come at 24.15. A move past that mark will strengthen the upward momentum and potentially result in further gains to test 24.35.

Conversely, a break below 23.75 will favour the sellers to take control. The downward action will likely find the first support at 23.50. A continuation of control by the sellers could break the support, and render the upside narrative invalid. Also, the resulting momentum could lead to further losses to test 23.30.