In the past few sessions, ASOS’ shares fell sharply and are coming back to a significant support level.

Asos’ Surperformance ratings highlight its strong fundamentals. Sales are in an important growth momentum, +40% last year and 3.5 times 2010 ones. Moreover, analysts previsions show that this trend should continue: revenues are expected to grow by 32% in 2014. The group financial situation is sound with a positive cash position every year. Furthermore, the stock offers an interesting potential considering the average target price at GBp 6050.

Technically, in daily data, even if moving averages are still in a downtrend, the rebound that started when touching the GBp 4335 area should send the stock prices towards GBp 5185. Moreover, technical indicators show a significant oversold condition which strengthens this bullish scenario.

Therefore, a long position could be taken at the current prices. The target will be GBp 5185 and a stop loss will be placed under the GBp 4334 support in case of a more important correction.