Shanda Games, a leading Chinese online game developer, listed on the NASDAQ, surged after the successful launch of a new mobile game, which became within 8 hours the 3rd Top grossing app on Apple's store in China. However, it knew a halt around USD 6 to fall sharply towards the short term support of USD 4.14, after sohu.com (one of Shanda games' company)released lower than estimates profit forecasts.

Fundamentally, the company shows three excellent financial characteristics. Firstly, treasury is strong and constantly increasing. It is estimated to rise by +40% in one year. Secondly, profitability is very high with a net margin of 25% estimated for this year.
Eventually, at current price, the company is trading 6.48 times its earnings for 2013 and thus has a significant potential.

Shanda Games is in bullish trend in the medium and long term. In daily data, moving averages are well-oriented. Prices are coming back on the 50-day moving average and on a trend line, which should stop the downward movement.

In this configuration, a decrease seems unavoidable in the USD 4.14 area. Investors could take a buy order on this level and get a good entry point to aim a return to the 20-day moving average around USD 4.80. A stop loss will be set below the medium term support.