How should traders play with Nazara Technologies?

Debuted on the exchange in March 2021, the stock has delivered about 20% return since then.

Nazara Technologies is engaged in the business of diversified gaming and sports media platform. It is a midcap company with a market cap of Rs 7857 crore. The company has posted strong revenue growth over the last 4 years. Though net profits have always been an issue as they have reported not-so-attractive profit figures over the same period, the company management strongly believes in improving their operating margins.

The maximum stake of the company is being held by the retailers (65%) while the promoters hold about 20% of the stake. The FIIs and the DIIs hold about 8% and 2% stake, respectively.

Debuted on the exchange in March 2021, the stock has delivered about 20% return since then. The 3-month performance of the stock stands at 24.51%. Thus, it has delivered a decent return to its investor in the medium term. Talking about the short term, the stock is in the consolidation mode and has delivered a mere 3% in one month. The stock is struggling to get momentum.

The stock is up over 4% today. The stock trades above its 20 and 100-DMA and the next resistance is the 50-DMA which lies at 2940. The RSI has jumped from 45 to 55 in a few trading sessions indicating that the stock has gained some strength. Along with this, the stock has witnessed a rise in its volume in the past few days. On the weekly chart, the stock faces the resistance of 10-WMA.

Cutting the story short, the stock looks to gain momentum and any closing above 2490 will indicate strong closing and the stock is ready for upside momentum. However, huge volume is a criterion for the big momentum.

An important point to note is that the stock is barred from intraday trading which means that the traders can only hold their positions. Traders must look for key decision points before getting into this trade. With correct price action along with volume, the stock has the potential to reclaim its all-time levels of 3200.