In the past few sessions, Playtech shares have suffered from a sharp fall and are now coming back to a significant level support.

Fundamentals of the group are strong and its Surperformance ratings are qualitative. Revenues are in a good dynamic as Sales are expected to grow of 13% this year. Moreover, the company offers an interesting profitability profile with an estimated net margin of 33% in 2014. Furthermore, Revenue and EPS estimates for the next year are regularly revised upward by analysts. The financial situation is sound with a positive cash balance for many years. Finally, the share benefits from a strong buy consensus and a 20% potential considering the average target price.

Technically, the security is in a negative configuration in the short term as the bearish trend shows. Nevertheless, the stock seems in an oversold situation, near to its GBp 656 support; this level might stop the bearish trend. The downside potential is limited and the timing seems perfect to benefit from a technical rebound in the short term.

Thanks to the technical pattern and Playtech’s strong fundamentals, active investors can take a long position above the GBp 656 level. The goal will be fixed at GBp 722. A stop loss will be placed under the GBp 656 support area, protecting from a more important consolidation phase.