Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) (FRA:M5BQ) is showing signs of breaking out of a multi-month consolidation pattern. The slow burn upwards over the past two weeks is being replaced by more forceful buying, as the ask gets chewed up in more convincing fashion. We examine further.
Midas Letter highlighted the company yesterday, when Namaste Technologies released back-to-back press releases which resulted in minor out-performance at the open. While not particularly awe-inspiring in nature, Namaste did materially diversify its product mix while showing impressive month-over-month patient enrollment growth in its online patient portal and mobile app, NamasteMD. The latter saw a ↑130% increase in registered users in approximately 2 months, with promises of more ahead after inking a revenue-sharing agreement—which includes co-branding and marketing collaboration—with Cannvas MedTech.
Although we didn’t necessarily believe that these press releases would be the trigger point to higher prices, the bubbling underlying consolidation and euphoric market conditions have apparently provided the right conditions for today’s move. Cloaked in rather lackluster trading action in recent months, the underlying technicals certainly show something more meaningful.
The most obvious thing is Namaste Technologies’ volume profile, which has been percolating upwards in recent sessions. Given that already 1.6 million shares have traded hands as I type, today’s run rate should finish well over 3 million shares. That’s a bullish sign, and could be the most volume traded since Namaste’s May swoon, which sent prices capitulating in the other direction. This time, it’s the bulls turn to profit.
Another aspect which catches our eye is the 20-period Relative Strength Index indicator, which is breaking out of its June peak. At almost 70, the ultimate upside is perhaps somewhat limited. However, there’s enough impetus and pent-up energy in the underlying formation that a material run on prices could take place. A possible limiting factor could be the overall market—which is in the late stage of a protracted bull run. But in the very short term, the bulls are firmly in control.
With relative market cap peers like Emerald Health Therapeutics Inc. and Newstrike Brands Inc. already experiencing massive runs themselves, it’s hard to project where the music stops. Keep in mind, the company has authorized up to a 10% buyback of the Company’s public float, although it’s unclear what effect, if any, is at play in this particular move.
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