RiT Technologies Ltd. (NASDAQ:RITT) Stock Made the Technical Breakout

[[tagnumber 0]]Yesterday RiT Technologies Ltd. (NASDAQ:RITT) broke out of the Bollinger bands range, hitting a new 52–week high during the session. The company attracted the attention of traders by announcing an agreement to supply its IIM solution for the rail network of a city in China, yet longer term the stock could easily lose the gains.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]RITT closed the last trading session at $1.99 for a share. The total gain from the previous close is nearly 10% and the new yearly high is at $2.08. Technically, the chart looks strongly bullish for today with the most important indicators just crossing critical levels. The trading volume yesterday was high above the average as well although it was not a record for the year.[[tagnumber 1]] [[tagnumber 0]]According to the latest press release, Tianjin City Rail Transit of China has deployed RITT‘s PatchView IIM solution to manage 6,000 ports used by 22 transit lines. The announcement does not mention when the deal was signed, or any kind of financial details, thus the effect of that PR could hold for a few days only to extend the rally of the stock.[[tagnumber 1]] [[tagnumber 0]]The company‘s financial report for the second quarter of this year shows significant growth in sales and g[[tagnumber 10]]ross profit, RITT even reports a small positive net income of $132,000 for the first six months of the year instead of the $4.4 million loss for the same period of last year.[[tagnumber 1]] [[tagnumber 0]]However, the report also shows a shift in the customer concentration that could have a negative side on the long term. While last year three major customers made up for less than half of the company‘s sales, this year RITT derives over 60% of its revenue from two related parties, implying high dependance on a single client that limits the growth potential of the company‘s business.[[tagnumber 1]] [[tagnumber 0]]Also, this year RITT has increased the amount of its outstanding convertible loan from $1 million to $3 million. Under the loan agreement, this amount can be converted any time into shares of common stock at prices by far lower than the current market price of the stock, causing dilution to shareholders. In addition, in June RITT issued warrants that grant the holder the right to purchase up to 6 million common shares at an exercise price of $2.25 per share.[[tagnumber 1]] [[tagnumber 16]] [[tagnumber 1]]