3SOF

Sold it at $2.48.

May go up more. But 30 minutes 10% gain, I am satisfied with it.

1. Profile

VoIP (Voice over Internet Protocol) service provider 8x8, Inc. (EGHT) offers internet-based telephony solutions for individual residential and business users as well as small to medium sized business organizations. 8x8's wholesale voice and video services include a suite of VoIP platforms with a session initiation protocol switching infrastructure at its core together with voice, video, and wireless endpoint devices to form an end-to-end solution.

Since its establishment in 1987, 8x8 has contributed to the advancement of voice and video communications on both technology and service provision levels. The company currently holds 60 United States patents with additional patents pending.

2. Technical Analysis

2.1. Long Term Chart



EGHT's long term chart shows one of those tech bubble era stocks that survived. Occasionally EGHT has huge short term runs and then it falls back to between $1.5 and $2. Seven sessions ago the stock had its one day record volume of 37 million shares traded.

2.2. Medium Term Chart



On the medium term chart we can see that the stock was respecting a descending trend line since December 2003. But, after touching it's medium term support area for the 3rd time, EGHT made a violent bullish breakout with record volume.

This breakout was technically significant and the stock is now medium term bullish.

2.3. Short Term Chart



The bullish breakout was so violent that it produced a wide gap. That gap was finally filled yesterday. Also the stock respected the 61.8% Fibonacci retracement level on close.

This seems to be the right time to buy, if you want to buy ...

3. Fundamental Analysis

3.1. Current Ratio



The Current Ratio is a ratio between Total Assets and Total Liabilities. It should always be above 2 in order for the company not to have liquidity problems over the near term. We can see that only in one year EGHT had a Current Ratio below 2 which was 2003. According to the last 10-Q Report filed with the SEC the Current Ratio now is about 3.4. I feel comfortable with that.

3.2. Revenues



My fiscal 2006 estimate is based solely on annualizing the first half numbers, so revenues on the second half (it's already under way) may surprise on the upside by a wide margin.

What matters to me here is that EGHT was already seeing strong demand for its products in calendar 2005, despite of the Bell South deal (which I don't know details, nobody knows because financial terms of the deal were not disclosed by the companies)

3.3. EPS



The company consistently lost money since it is operating (only a profitable year in 1998). But, 2006 figures still don't take into account the recently announced Bell South deal, that will without a doubt at least produce some additional revenues and maybe reduce EPS loss.

4. General Overview

I believe EGHT is a speculative play since the company has no profits and financial terms of the deal with Bell South were not disclosed, so the market really doesn't know what the future will hold for the company.

But, as I see it, seven days ago at the open ($3.19) people were discounting that the BLS deal would make EGHT grow 10 fold. On close yesterday ($2.10) they were discounting the deal had almost no meaning whatsoever.

I think the deal has some meaning, at least in credibility and visibility terms for EGHT, and probably some revenues too (we don't know how much).

I feel encouraged by two things:

1) Revenue was already growing fast in calendar 2005. VoIP products are starting to get strong demand.
2) The technical picture is quite bullish, both on the short term and medium term chart.

4. Trading Plan

I'll buy EGHT around today's open for the 3 SOF Fast Portfolio and then I'll monitor it everyday after the close with an updated analysis. I will for sure sell this position before December 31st.

It is great when they fill_the_gap   

Taking the chance today.

Glad that you are in on this one

Still holding some of my shares from before the breakout - sold half just under 3.00, looking for the other half to go substantially higher in the next couple months.  I do think this BLS deal has serious potential for EGHT in the medium term, and that EGHT may also be a potential buyout by BLS as they try to develop their VOIP service.  Will wait and see for now....

I did not buy EGHT today cuz' i slept long .... but looking at David's chart & my chart the 61.8% Fibonacci Retracement should not go down below 2.04 but it closed today's session @ 1.99 & 3 ticks down more @ AH... goodluck for those who hold (i'll take position if things goes my way)

Good call David!

The odds favor the longs GREATLY on this one!

I SALUTE!

willey

Tobin Smith has a lot of followers and he did suggest when the stock ran up to above 3 for them to take profits but in his end of year note when he sells many positions he has EGHT as a sell at the market so today at some point if there is selling then it may be that but in pre market the stock is up 4% so maybe any of his folks sold or just decided to hold.

This stock may have enough volume that his followers have little effect.

Thanks for the info and analysis, you guys are great 

I think the cut of the 61.8% retracement wasn't significant (too small with low volume) and I'll continue holding EGHT, waiting for a rally. I don't think this stock will just lay down and die.

Also I don't want to move much more on the Fast Portfolio, I got my picks, now it is time for the market to judge them.

EGHT: was in at $2.09 and took a loss at $2.00.

The stock traded iN a range this year. Strong support $1.25 and strong resistance: $2.25.
Minor support at $1.5 and resistance at $2.00.

The maximum pain is $0.10 for me.

My gain on SFCC this morning makes up my loss on EGHT.

Quote from: shawFund on December 22, 2005, 10:39:43 AM
EGHT: was in at $2.09 and took a loss at $2.00.

The stock traded iN a range this year. Strong support $1.25 and strong resistance: $2.25.
Minor support at $1.5 and resistance at $2.00.

The maximum pain is $0.10 for me.

My gain on SFCC this morning makes up my loss on EGHT.

EGHT cut the 61.8% FIBONACCI... waiting for the right entry

I dont know about others but this stock has enticed my gambling instincts a lot. I am throwing some more crumbs to this monster if David intends to HOLD, otherwise....

EGHT is killing the December Edition of the Fast Portfolio 

I don't know why it is falling like a rock, but I think a second leg up will occur anytime. The market usually gives a second chance, or at least, a chance for not such a dramatic loss for the ones who bought above $3 just a few days ago.

EGHT is damaging the Fast Portfolio but I'll give it two more days to rebound.

I agree (and hope) that EGHT should show some positive movement from here.  The price came down to touch the 200 MA yesterday, which also coincides with a level of strong support at 1.83, as can be seen on the 1 year chart.  The range from 1.83 to 1.74 looks to be a solid support band, as the price by volume chart indicates.  I am still holding a portion of my shares which I bought before the gap up, at 1.75.  For me, a close below this level would indicate that the bears are intent on bringing this all the way down, but I think this is unlikely.  For now, just have to sit tight and wait out the reversal. 

For fast trade, it is better to cut loss quickly. But be patient when you have a winner. Let the winner's profit run (don't exit a winner too quickly).

Wishful thinking is a dangerous game. It may or may not rebound. What to do if it continue going down and did not give a second chance. In the mean time, I have put money into other promising stocks.

I cut my loss two days ago and put the money into ELN, ONNN, MPS, MCDTA, SANM, MOVI, SFCC, SWIR etc. All made profit except SWIR ($11.70 -> $11.50, took a $0.20 sudden loss again).

Have a Merry Christmas. Hope to have a good week trading, next week - last week of 2005.

Hi David & all holders here.  I'm reasonably sure that "ChangeWave.com" subscribers recently received a sell notice here & THIS is the reason for the very recent downside stock pressure.

All must remain aware that "bigger players" with different agenda's ( raising cash for newer trades ) are frequently "at work" behind the scenes

Hope this helps explain some!  I'd suggest patience here...unless downsides stops are reached!

willey