The stock of PC Jeweller gained strongly on Friday with heavy volumes. Thanks to sharp gains, the short-term outlook for PC Jeweller has turned positive. However, being a highly volatile stock, it could swing wildly without giving any escape route for traders.
The stock finds immediate support at ₹63 and a close below that could change the short-term outlook to negative. Immediate resistance appears at ₹91 and a close above ₹105 will change the medium-term outlook to positive.
The maximum loss could be the premium paid (that is, ₹11,475), if the stock fails to hold above ₹80 at the time of expiry. However, profit potential is high if the stock surges sharply within this expiry.
Traders can exit if the premium of the option rises to ₹17 or falls to ₹2.5. Alternatively, traders with a high-risk appetite can consider going long with a stop-loss at ₹75.
Follow up: Though the stock gained last week, investors can exit Zee Entertainment position as the time value will hurt the position.