The stock of Punjab National Bank (PNB) (₹106.61) lost 3.2 per cent last week. But during the preceding four weeks, it had posted gains. Thus, a broader look at the chart hints that last week’s price drop can be nothing more than a corrective decline.
The 21-day moving average at around ₹105 is a notable support. Also, the price action indicates that the region between ₹103 and ₹105 is a base. The stock can bounce off this band. On the upside, PNB’s share price can retest ₹112 in the short-term. Hence, traders can consider buying call options.
We suggest buying the 110-strike call option of June expiry. This contract closed at ₹1 on Friday. As the market lot for PNB derivative contracts are 8,000 shares, the outflow for this trade would be ₹8,000. This will be the maximum loss and that would occur if the stock fails to surpass ₹110 on expiry. The break-even price for this position is ₹111.
When the stock rises to ₹112 over the next few sessions, the premium of 110-strike call can increase to ₹2.80. So, this can be the target. Hold the contract till expiry.
Traders with higher risk appetite can consider futures. That is, buy PNB June futures at ₹106. Target and stop-loss can be ₹112 and ₹103 respectively.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.
Published on June 14, 2025
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