PC Jeweller’s stock rallied more than 40 percent!
After a straight sharp fall, PC Jeweller on Friday gave a smart rebound move with a rally of more than 90 percent in last two trading sessions. On Thursday, Stock had made a low of Rs 94. After it, stock started rising and stock continues this trend on Friday also by making an unexpected high of Rs 180. On the same day, it rallied more than 40 percent.
This move came after a clarification from Management of the company and preponed of board meeting to consider buyback of fully paid equity shares. The management will now meet on 10 April to consider the same.
On Thursday, I had suggest to buy PC Jeweller for a target of Rs 130 and second target ( optional) of Rs 150. Because of little clarity on the recent move in PC Jeweller, it had become important to now look and trade stock with a technical analysis. As a bounceback, I think level of Rs 150 was a maximum target for it which it achieved and also breachess in next two days.
Now, after having such a sharp and great move in PC Jeweller, it doesn’t look that it’s just a bounce back. Because if this positive move in PC Jeweller was a bounce back, then it should not have gave almost 100 percent return from recently made 52week low.
So it’s good now to hold PC Jeweller?
As i believe, I think it’s a recovery in stock price of PC Jeweller. And if it is really a recovery, then chances are higher to see more gains in stock. Fundamentally, Company is very strong and has good future as per clarification of Management. For me also, I think it is true that PC really looks strong and with a bright future. After Gitanjali Gems fraud, there are ample opportunities for PC Jeweller to grab customers of Gitanjali Gems despite of some small problems. Also, because the titan share now trades at a very higher price, it opens doors for PC Jeweller stock to have a higher valuation.
However, massive selling from Fidelity funds created fearful pressure in PC Stock. Even now, there is no clarity on why exactly Fidelity fund take a exit from PC Jeweller through Open market selling and not from Bulk deals. Therefore, those who are holding shares/Future lots of PC Jeweller really needs to keep a stop loss in their position to avoid heavy volatily.
As per technical analysis, I think PC Jeweller stock has more chances to continue with this sharp surge as a recovery and not a bounceback. So, those who have bought PC Jeweller at very lower levels have option to keep a stop loss at around Rs 155/148 to avoid heavy losses and then they can continue holding their positions. In case stock rise sharply from current levels, then keep trailing your stoploss in accordance to previous closing price. Say, stock today rose more than 40 percent and get closed at around Rs 250. Then you have to adjust your stoploss from previous Rs155 to around Rs223/220 i.e 11 to 12 percent down.
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