Naspers Limited (JSE: NPN) has shown some positive signs recently. The share price has appreciated over 9% year-to-date and closed in the green for five out of the last six trading sessions. However, the company faces challenges, including a persistent discount on its share price compared to its net asset value (NAV).
One positive factor is the focus on e-commerce, a high-growth sector. Additionally, the share repurchase program could help close the NAV discount and boost the share price. Analysts’ forecasts for future earnings are negative, which puts downward pressure on the share price. Overall, the fundamentals present a mixed picture, with both opportunities and challenges.
Technical Analysis
Naspers’ share price is currently trading slightly lower despite the recent bullish trend. However, there are positive signs. The share price is still above the key moving averages [50-SMA (blue line), 100-SMA (orange line), and 200-SMA (red line)], indicating potential bullish momentum.
Therefore, renewed buying pressure during the session could bring the 346,274 cents resistance level into play in the near term. A successful break above the initial resistance and SMAs could confirm the bullish momentum and would leave the three-year high of 358,266 cents as a level of significance higher.
The RSI (Relative Strength Index) is nearing overbought territory at 66.91, suggesting a potential retracement. If this occurs, the 320,758 cents level becomes significant support. A sustained break below this level with high volume could open the door for further declines towards 204,173 cents and 282,638 cents.
Summary
Naspers Limited’s share price is caught between conflicting forces. The recent price gains and focus on e-commerce are positive signs, but the negative earnings outlook and NAV discount are concerns. Technically, the picture is mixed. A break above resistance at 346,274 cents could signal a continuation of the uptrend, while a drop below 320,758 cents could lead to further selling pressure.
Sources: TradingView, Simply Wall Street, AASTOCKS, News24.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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