EGHT

[David Randolph]

i found it on the yahoo message board. there was a link to briefing.com. david feels pretty strongly about this one. might buy some more. we shall see. soxguy

Thanks for the information soxguy

Those guys seem like short term traders, upgraded the stock at September 20th when it closed at $1.19 and now downgraded it. I felt something like this would happen ... perhaps we'll close that gap at $1.44 and clean all the weak hands out of this VOIP play.

I'll continue holding no matter what happens today. Good luck !

[magu]

Downgrades from briefing.com
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/UpgradesDowngrades.htm

DowngradesSort alphabetically | Sort by brokers

Company Ticker Brokerage Firm Ratings Change Price Target

EOG Resources EOG UBS Buy » Neutral

Novellus NVLS Stifel Nicolaus Hold » Sell 

TiVo TIVO Oppenheimer Neutral » Sell  $5

MIPS Techs MIPS AG Edwards Buy » Hold

Marathon Oil MRO Citigroup Buy » Hold

Royal Dutch Shell RDS.A HSBC Securities Neutral » Underweight 

Tellabs TLAB First Albany Buy » Neutral

Marathon Oil MRO Friedman Billings Mkt Perform » Underperform  $86
Allergan AGN Thomas Weisel Overweight » Market Weight

8x8 EGHT Merriman Curhan Ford Buy » Neutral

Merck MRK HSBC Securities Neutral » Underweight  $41

[thai626]

I'm out at 1.65 guys   Looking to buy back at a cheaper price.

Good luck to all still holding!

Thai

[David Randolph]

I'm with you on this one. Just bought in at 1.55 after I got stomped out of SIGA.   

I'm out at 1.65 guys Looking to buy back at a cheaper price.

Good luck to all still holding!

Thai

Well, you still got a profit of 6.45%, not bad

You know I'm not playing that kind of game here. It wouldn't be usefull for 3 SOF subscribers, and not usefull for me either ! I'm leaving the traders arena to enter the speculators zone.

Concerning EGHT, I actually expected something worse today (given the downgrade of the one analyst following the stock). It didn't went down 10 or 15% as it looked at the open.

I'm starting to think that the technical picture can unfold both ways:

1) EGHT goes down to the ascending support zone, $1.49 for the ascending TL1, $1.44 for the opened gap or $1.42 for the rising simple moving average (red on the chart below)
2) The support zone comes to EGHT ! TL1 is rising $0.01 per trading day and the SMA is also rising (which is bullish).

Another issue that I'm considering is that the stock is holding the $1.60 level on close, and this was a prior resistance level, now support.

Give it some more days and EGHT can actually push higher above $2 without breaking $1.60 on close. I was encouraged by the last two day's market action.

Fundamentally nothing changed, we have 10 quarters in a row of growing revenues and the company is almost profitable. I believe it makes perfect sense to have the phone on the computer, especially for businesses, why have one computer and one phone for every employee? Why not cut costs on equipment and phone bills merging the two equipments?

I know what you're thinking: "Ok, that's true David, but there are a lot of companies in the VOIP space, many of them bigger and better prepared". And I say: "You're right, but the market is big enough for everyone, and this opportunity won't have a big impact on a big company, like Bell South or AT&T, for example, but EGHT is a tiny company with a $100 M market cap, so a surge in demand will have a huge impact on the company's numbers and stock price".

We covered the technicals and some fundamental ideas, now I just have to say that I'll continue holding EGHT whatever happens.

[thai626]

[
Well, you still got a profit of 6.45%, not bad

You know I'm not playing that kind of game here. It wouldn't be usefull for 3 SOF subscribers, and not usefull for me either ! I'm leaving the traders arena to enter the speculators zone.

Concerning EGHT, I actually expected something worse today (given the downgrade on the one analyst following the stock). It didn't went down 10 or 15% as it looked at the open.

I'm starting to think that the technical picture can unfold both ways:

1) EGHT goes down to the ascending support zone, $1.49 for the ascending TL1, $1.44 for the opened gap or $1.42 for the rising simple moving average (red on the chart below)
2) The support zone comes to EGHT ! TL1 is rising $0.01 per trading day and the SMA is also rising (which is bullish).

Another issue that I'm considering is that the stock is holding the $1.60 level on close, and this was a prior resistance level, now support.

Give it some more days and EGHT can actually push higher above $2 without breaking $1.60 on close. I was encouraged by the last two day's market action.

Fundamentally nothing changed, we have 10 quarters in a row of growing revenues and the company is almost profitable. I believe it makes perfect sense to have the phone on the computer, especially for businesses, why have one computer and one phone for every employee? Why not cut costs on equipment and phone bills merging the two equipments?

I know what you're thinking: "Ok, that's true David, but there are a lot of companies in the VOIP space, many of them bigger and better prepared". And I say: "You're right, but the market is big enough for everyone, and this opportunity won't have a big impact on a big company, like Bell South or AT&T, for example, but EGHT is a tiny company with a $100 M market cap, so a surge in demand will have a huge impact on the company's numbers and stock price".

We covered the technicals and some fundamental ideas, now I just have to say that I'll continue holding EGHT whatever happens.

Ya......I know what you're saying David.  At first I wasn't going to sell either but I got burned too many times holding a stock when I shouldn't have .  In this case, I was expecting EGHT to move lower at the open but to my surprise, it held strong for the whole day. 

I may get back in very very soon but I want to see if it will attempt to touch the support line in the 1.50s.  If I can get back in at 1.55, I'll be happy, otherwise, I'll just get it at any price I can afford.   

Good luck!

Thai

[David Randolph]

Ya......I know what you're saying David.  At first I wasn't going to sell either but I got burned too many times holding a stock when I shouldn't have

I know what you mean thai626, and in doubt, stay out, so you did well !

I find it easier to hold a position for a longer period of time when I base my decision on both technicals and fundamentals, instead of just reading the tape. The tape is always changing and one has to do many trades to keep up with it, most of the times losing the main trend.

One has to be a very, very good short term trader to beat commission costs and slippage. Longer term I believe short term traders are doomed to fail.

I may get back in very very soon but I want to see if it will attempt to touch the support line in the 1.50s.  If I can get back in at 1.55, I'll be happy, otherwise, I'll just get it at any price I can afford.

Well, Friday's low was $1.57, so you almost made it

Some positive news, but irrelevant for the share price over the short term: 8x8, Inc. Chairman and CEO Bryan Martin Appointed to Governor Schwarzenegger's Broadband Task Force

EGHT held $1.60 on close again. Supports now stand at $1.50 for TL1 and $1.43 for the 50 days SMA. The stock also has that micro gap opened at $1.44.

It looks like supports are coming to EGHT, instead of EGHT going down to meet them. After this consolidation period is over I believe EGHT, given its technicals and fundamentals, will breakout above the $2 psychological barrier.

[David Randolph]

EGHT is still waiting for supports to catch up before it bounces. We have TL1 at $1.52, 50 day SMA at $1.44 and the little gap still opened at $1.44.

I expect the stock to trade around current levels, and perhaps have an intraday dip to support before it makes another atempt at the $1.95 high.

Technically the stock is in consolidation mode. Fundamentally I think it is very attractive, as you can read on the rest of this thread.

I'll continue holding EGHT.

[David Randolph]

EGHT went down a bit, closing below $1.60, but still didn't touch any of the support areas I've been mentioning. The stock wants to fly, but it isn't ready yet.

For tomorrow I have TL1 at $1.53, the 50 day SMA at $1.45 and the micro gap at $1.44. After several attempts to bounce, I think the real rally will come after testing at least one of these supports.

For all I care the stock may touch supports and then rise 15 or 20% in one day, absorbing the last couple of weeks consolidation period.

I'll continue holding EGHT.

[shawFund]

Hi, here is my take on EGHT:

  This stock historical trading pattern is that each of the previous three years, the stock  reached year high in December. The best time to buy is around August.

  See chart

[thai626]

This is where I would test the water with EGHT.    I would buy at this level but unfortunately.......all my funds have been used on other stocks.  It's trading right at its support level so this would be a great time to jump in.  Plus......David is so happy with the stock fundamentally.   

Too bad I don't have any funds to jump in.

Thai

[David Randolph]

I guess I would be worried about EGHT's technical picture if I wasn't expecting a possible decline to close the micro gap opened at $1.44 for about a couple of weeks now.

A speculator must always be prepared for all possible outcomes, because, indeed, everything is possible. And he'll function much better if he's not surprised when the situation arrives.

I've read this thread (again), and the initial analysis was quite bullish, but I had one main concern:

I'm a believer in VOIP and I think EGHT can be an attractive long term investment. My biggest worry is dilution. Dilution can make the market cap grow, indeed, by 12 times over the next 3 years, and yet the share price only doubles, for example. So, if I decide to invest on EGHT, I'll watch the number of shares issued and outstanding like a hawk.

You know companies only reveal the number of shares issued and outstanding on their quarterly results SEC filings, so nobody knows the exact number on a daily basis. This is one of the risks of investing in small and still unprofitable companies.

But it wouldn't make any sense to chicken out now that EGHT share price is doing what I expected it to do for several days, that is, come down to medium term support levels before another leg up unfolds.

My best guess is: the weak hands will sell shares to a low around $1.44 and then the stock closes back above $1.5. That would be a technically perfect bottom.

I will continue holding EGHT through tomorrow's session, I need to see a clear close below $1.44 to know I was wrong. Until that happens, I'll maintain that EGHT is a buy with the same conviction I had on the initial recommendation.

The market will talk and I will listen, because above all, I'm humble and do respect the market.

[David Randolph]

EGHT felt the need to come out and say: "look, here's our business model" when it released today's press release:

New Packet8 Virtual Office PLUS Plans Eliminate Upfront Equipment Costs for Business Subscribers

I think it is a simple and sound business model which is working, as shown by the 10 consecutive quarters of revenue growth.

Technically, here are my current thoughts:

1) $1.50 is probably the most important support area. It was a previous low and yesterday EGHT touched it again. This time it coincided with TL1 on the chart below, making it a double support area. The stock recovered some ground today even on a sharply down session in the general market.
2) Perhaps, when I talk about that micro gap at $1.44, I'm being too specific, and stocks don't behave in a mathematical manner. They reflect more of a human phenomenon.

So I'm completely opened to the possibility that the low on EGHT is in and the stock will trend higher from now on (I mean, the short term trend, because the medium term trend was already bullish).

Anyway, I can't be completely sure about the short term. But one thing I'm certain. I'll continue holding EGHT.

[David Randolph]

Another positive day for EGHT, moving further away from the $1.50 key support area. Fundamentally, the company seems very active pushing up their topline, check the aggressiveness of their website:

Packet8

Here's the quarterly revenue chart until Q3, 2006:



I'm pretty sure Q4 2006 will be another record quarter in terms of revenues, above $14 M (the one analyst covering the stock is expecting $14.48 M), bringing the company closer and closer to profitability. I think if the company is able to surpass $15 M a quarter in revenues it will be profitable. It's not a matter of "if", but "when". I would say 2Q 2007 will already show a little positive EPS.

I'll continue holding EGHT.

[David Randolph]

Unfortunately EGHT is still hovering around the ascending TL1 support. The 50 days SMA is coming up at $1.48 tomorrow, and we still have that little gap opened at $1.44.

As we've seen on this thread, EGHT's fundamental trends are healthy, but the market is taking some time to prove me right on this one. So, maybe I'm wrong.

Maybe, but for the time being, the medium term chart is still bullish ... as I see it, only a close below $1.44 will definitely turn the chart bearish.

Although I have confidence in my fundamental analysis, the market will is always supreme, in other words, I know what I'm doing, but the market always knows better. I respect that.

So, the trading plan for EGHT is: HOLD for as long as the stock is set to close above $1.44 (it may go to that point on an intraday basis, to close the micro-gap, but then claw back up to close above $1.50 - that would be an extremely bullish candlestick). SELL if the stock is set to close below $1.44.

[tokyopua]

EGHT looks determined to fill that gap before it can get back to the business of going higher.  It even broke its trend line in the process...

For anyone on the sidelines, a buy at 1.43 can likely give a good return if you can get it there (I predict it fills and sort of bounds back up a bit elastically and hopefully close the day back near the trendline.)