EGHT (8x8): My View

8x8: Today is a good day to get into 8x8 puts. The stock is due to announce in several days and it looks like its not going to be too good. Today the stock already started to slip in anticipation of the earnings report, which means that there is some insider trading activity.

7.50

EGHT141122P00007500

0.76

0.00

0.80

0.95

12

569

We are in at.76 as this last trade is current enough to be right inside the spread.

So lets take a look at why this is a good idea by looking at the analysis's expectations for this quarter:

Not too good, Also look at the collumn right above, in the Growth Est. EGHT has an expectation of -40% while the benchmarks, Industry and the S+P are expected to have good postitve results. This means that the public is optimistic and wrong about the run up to earnings. Lets look at the price action as this stock has run up to earnings.

As you can see there has been a run up over the last week or so and furthermore, you can see that the three most recent candles (graphical results of last three days of trading) are displaying "top" signals: the top of the candle has no body, with tracers reaching upward, with the bottom of the candles having the thick body. This shows that the price tried to reach upward but there was no juice behind it, and it happened three days in a row, showing upward weakness. Hey, shit can happen. The stock can announce a great suprise earnings report and this thing can go off to the races. However, that is not what is LIKELY to happen. So with the deck apparently stacked in our favor, we go ahead and purchase a put.

More to come, stay frosty.

Mark