8×8 Inc. (EGHT) — This telecommunications company develops services for Internet protocol (IP), telephony and video applications. It also offers web-based conferencing and cloud-based computing services. I first recommended EGHT on Nov. 17, 2011, at $3.85, and several times since (most recently on Feb. 27 at $10.34) as a key cloud computing holding.
Forbes included 8×8 on its 2013 list of “America’s 100 Best Small Companies,” and at the end of February, the stock was added to the S&P SmallCap 600 Index.
Technically, EGHT is trading in a powerful bull channel that began in April 2012. It has support at its 50-day moving average at $10.47, and the bullish support line and 200-day moving average at $9.91.
On Friday, the stock traded an “inside bar.” This occurs when trading is completely within the boundaries of the prior bar (Thursday), and it means that the balance between buyers and sellers, recently dominated by the bears in EGHT’s case, is evening out. Then, on Monday, the stock gapped up from the inside bar and its 50-day moving average — another powerful indication that the stock is headed higher.
Buy EGHT for a trade to $12. Long-term investors may want to hold this stock for participation in the cloud computing services sub-sector. Fundamental analysts’ mean 12-month target is $12.40.
