YES Bank shares reached an intra-day high of ₹ 19.44, up 9.6% from the previous day's close and the highest point in the last two months, following a potential deal with Japan-based Sumitomo Mitsui Banking Corp (SMBC).

The Japanese financial behemoth was reportedly in advanced negotiations to purchase the majority of YES Bank. The Reserve Bank of India (RBI) has verbally assured SMBC that it will retain the majority stake in YES Bank.

A 51% stake sale in YES Bank would give SMBC effective control, pending regulatory approval. In addition, if the transaction is completed, a mandatory open offer for up to 26% of the bank's equity will be initiated.

According to CNBC TV18, the report on Sumitomo's acquisition of a stake in YES Bank is incorrect. No application has been submitted to the RBI for approval.

Against this backdrop, what should your stock investment strategy be - should you buy, sell, or hold YES Bank stock at its current price?

Here's a technical guide to help you develop your trading strategy:

YES Bank

Current price: ₹ 18.60

Upside Potential: 34.4%

Downside Risk: 13%

Support: ₹ 18.31, ₹ 17.85, and ₹ 17.40

Resistance: ₹ 19.90, ₹ 20.40, and ₹ 20.80

YES Bank's stock has been a major laggard on the stock exchanges, moving in the range of ₹ 11-25 in the last five years. At current levels, the stock is seen attempting to break through its 100-day Simple Moving Average (100-DSMA), a key medium-term indicator that has been below since October 28, 2024.

The stock's daily chart indicates a tepid overall bias as long as it trades below its 200-DSMA, currently at ₹ 20.40. The weekly chart shows a strong resistance zone between ₹ 19.90 and ₹ 20.80.

Only a break and sustained trade above these hurdles will help to revive sentiment at the YES Bank counter. Following that, the stock may return to the upper end of the current trading range, around ₹ 25.

However, if the stock fails to stay above the 100-day moving average (DMA) of ₹ 18.31, it may fall back to its support level of ₹ 17.20. Interim support for YES Bank stock is expected around ₹ 17.85 and ₹ 17.40 levels. Currently, the stock's downside appears limited to ₹ 16.17 levels.