Rarus Technologies Inc. – Another Momentum Play

UPDATE: We no longer cover RARS and this update is to close out our coverage with a summary of results. We alerted our subscribers to RARS on the morning of May 15, 2012. The share price had been trending downward and we thought there might be an opportunity to take advantage of a dip. Sure enough, RARS dropped from the $0.09 – $0.10 range of the 14th to $0.065 to $0.075 range all morning on the 15th. Then it reached a high of $0.136 on the 18th. Theoretically the maximum profit on this stock based on our alert was 123%, but in reality alert traders should have made profits in the 30% to 60% range in three days.

Original Post to this Site:
Our latest momentum play, Rarus Technologies Inc. (OTCQB: RARS), was classified as an exploration stage company in the business of exploring for minerals until May 8, 2012. But on May 8 the company acquired, under license, the rights to the software of an internet business concept called Zngle.

Per the company, “Zngle is a social media platform that allows members to make posts to specific zones including: family, friends, acquaintances, colleagues, custom, dating, and community. It allows members to communicate with traditional SMS chat along with video mail, voice chat and video messaging, it also has a mobile app that utilizes the API system for zngle.com with an enhanced geolocation feature coupled with augmented reality to create a interactive experience with local businesses.”

Rarus Technologies now calls itself “an emerging technology company focused on establishing an innovative business model intended to bridge cutting-edge social media and e-commerce into a marketplace that connects friends, family, consumers, and vendors in new and exciting ways.”

Rarus Technologies has reported no revenues through March 31, 2012 and has negative equity as of that date. RARS was very lightly traded until May 9 when volume exploded and the price doubled. Since the the price has trended down and closed yesterday at $0.097 after spending most of the day under $0.10. Could this be an opportunity to buy on a dip?

As with our other momentum alerts, we bring this company to your attention because of the increase in investor awareness and we believe things could get interesting very soon. However, RARS does not seem to be a good prospect for long term value investors at this point and is likely only appropriate for risk seeking investors prepared to lose their entire investment, but might offer early investors a chance to make a large, exciting profit as a short-term play.

As we said, RARS is only for those looking for a highly speculative play. All the attention paid to RARS will likely drive a lot of volume, but this does not mean prices will go up.

Investors interested in RARS should be prepared to get in quickly when they feel the time is right, watch the stock closely and take their profits (if any) at a level they choose. On the buy side, we recommend that investors limit their bid price so they get in at a reasonable price. If the stock turns out to have a dramatic price rise and they miss out because of a low bid, there’s always next time. In our opinion this is much better than getting stuck buying near the peak price.

Investors in RARS should be prepared to lose their entire investment. Always remember to do your own due diligence, checking up on company filings and consulting with an investment professional.

Additionally, remember our disclaimer.

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