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The bullish outlook will remain intact for YES Bank ( ₹339.95) as long as it stays above ₹308. The stock finds a major support at ₹287, and only a close below it would trigger a fresh fall in the stock. Immediate resistance is at ₹350. A break above it can take the stock higher to ₹372 — the next key resistance level.
F&O pointers: The YES Bank futures contract trades at a discount with respect to the spot close of ₹342.70 due to the dividend payment of ₹2.70 per share for which the ex-date is June 4. YES Bank June futures added 14.35 lakh shares on Friday along with fall in share price. Option trading indicates that the stock could move in the ₹330-350 range.
Strategy: We advice traders to buy 350-call, which closed with a premium of ₹7.65. As the market lot is 1,750 shares, one has to fork out ₹13,387.50 for this strategy. The premium paid (₹13,387.50) would be the maximum loss one can suffer and that will happen if YES Bank fails to rally.
To make the position profit, YES Bank has to move past ₹357.65 comfortably. Book profits if YES Bank touches ₹372 and exit with losses if the stock dips to ₹330. We advice traders to hold the position for at least two weeks.
Trades with high risk-taking ability can buy YES Bank futures contract, with an initial stop loss at ₹330. Move the stop-loss higher to ₹350 once the stock moves past that level. Traders can aim for an initial target of ₹410.
Follow-up: Hold SBI call option
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