Fundamental: RAIT (RAS) is a REIT, a real estate investment trust, that has a strategy of transforming their company into a more focused, cost-effective and lower leveraged business that will concentrate on its core commercial real estate lending business. Management guidance from Q4 2016 stated that 2017 will be a "transitional" year from RAIT Financial in which further declines in earnings and CAD are to be expected. On May 3, 2017, RAIT Financial sinks 7% after Q1 results; however, everything is going as planned and the managemnt is managing debt reduction well. RAIT Financial's management expects to gain over time that will offset the loss as remaining portfolio asses are divested.
REITs are said my many online that the financial sector and REITs perform poorly when rates are increasing because it is hard for them to keep up with the rising credit costs. Well, this is not always true for every stock and in every situation. RAS and a handful of other REITs are an exception. Also, the the economic cycle has changed with different factors pushing and pulling markets, stocks and investors. This time the US is in a recovery phase with prices that will rise based on different factors. Looking forward at the rest of the year, I see RAIT Financial finishing up the "transitional" phase of their company, essentially renewing themselves and bringing something new to their market and investors, with higher interest rates, increases earnings and profits. I will continue to monitor their health for the rest of the year to make sure progress is being made.
Technical: - At a key level of support of February 22, 2016 that ranges about 30 to 40 cents. I am crossing fingers that buyers do step in at this level. - Fibonacci confluence - PI pattern and Thunder-strike Pattern, which reflects a fundamental shock, which in this case was the Q1 result of earnings.
Targets: The benchmark levels on the chart are levels where I will re-evaluate the company.