Whilst my understanding of the fundamentals of RESAAS Services Inc. (RSS:TSX.V; RSASF:OTCQB) at this point is sketchy, I don't hesitate to bring it to your immediate attention because the technical picture looks so positive—it's not often you come across a stock with a chart looking this good. Fundamentally, the company is in the real rstate business, and while that may seem like a turn off, you have to know as well that the company has developed a unique app for use by licensed real estate brokers, which (as I understand it) enables them to get all the listings before other brokers. Basically RESAAS is set to drag the real estate industry kicking and screaming out of the Stone Age, where it takes weeks to get documents finalized, etc., into the modern world where it takes mere minutes. I will endeavor to find out more about this, and if any of you have sufficient time on your hands for a bit of sleuthing and find out more, I will be pleased to learn what you discover.
Turning now to the technicals for the stock, we will start by looking at a 7-year chart, which gives us an overview of where it is in its cycle. As we can see it has been in a severe bear market that followed the giant Double Top of 2014 and 2015, which at the current price has lopped over 93% off its value. However, the rate of decline slowed during the latter stages of this bear market, with a bullish Falling Wedge developing over a 2-year period from mid-2016 to the middle of last year. As this Wedge pattern closed up, the price broke out of it by moving sideways and although there has so far been little upside progress, we can just make out on this chart that a Double Bottom base pattern has formed, and we can definitely see a big build-up in upside volume over the past 6 months that has driven its volume indicators strongly higher, which is a very bullish indication indeed. These are all signs that it is on the point of reversing into a new bull market.
The 1-year chart enables us to view the Double Bottom pattern of the past 6 months or so in much more detail. As we can see it is a particularly fine example and while these patterns do sometimes abort, the chance of this one doing so is greatly reduced by the strongly bullish volume pattern and resulting positive volume indicators, which suggest that not only will it not abort, but that the price is unlikely to return to the support at the lows again. As far as timing is concerned the price and its moving averages are now starting to bunch together with the 200-day starting to flatten, suggesting that an upside breakout from the pattern soon is a growing probability.
On the 6-month chart we can see recent action in more detail and how it is currently reacting back following the last run-up. While in adverse market conditions this reaction could carry further, it could start higher again at any time. So it is viewed as a buy on any further weakness back perhaps to the 50-day moving average now at about CA$0.27 or on any sign of its turning up again.
Finally, it should be pointed out again that although we don't generally like the real estate sector, RESAAS is viewed as a standout. The stock is very thinly traded on the US OTC market where it should for this reason be avoided. There are 53.6 million shares in issue, which is reasonable.
RESAAS Services website.
RESAAS Services Inc., RSS.V, RSASF on OTC, closed at CA$0.34, $0.30 on 18th January 2019.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
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Charts provided by the author.
CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
