Elephant Talk Communications Corp. (NYSEMKT: ETAK) –is looking for the right signal from conflicting technical indicators. Shares of mobile network communications provider Elephant Talk Communications Corp. (NYSEMKT: ETAK), which are currently trading in a narrow range of $0.16-$0.18, could be headed significantly higher over the coming months as uncertainty hanging over the company dissipates. Elephant Talk has a current market capitalization of just $27 million, but the company is making moves to restructure its enterprise market offerings for mobile network operators such as T-Mobile and Vodaphone.
The latest good news for New York-based Elephant Talk, was a September ruling by the NYSE that the company would not lose its stock market listing. The company was essentially granted a reprieve until Dec. 31, 2016 to improve its overall financial performance. In the meantime, the company has been attempting to line up new partnerships and deals headed into 2017, including a new partnership announced in September with Expeto, which would help to extend Elephant Talk’s offerings into the enterprise market.
Elephant Talk Communications Corp. (NYSEMKT: ETAK) next big test will come in mid-November, when the company is scheduled to release its Q3 earnings. The current consensus estimate is for the company to earn -$0.01 per share on revenue on $3.66 million. If the company manages to outperform those expectations and break even, that could be a signal for traders to push the company’s stock up higher.
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What jittery traders are keeping their eyes on is the price target for Elephant Talk, which Yahoo currently has set at an ambitious $0.50. That would represent a steep move up from the current price of $0.16. Ever since January, Elephant Talk’s stock has been drifting downward from $0.28 and is currently trading in a very narrow range around $0.16. Over the past 52-week period, shares of Elephant Talk traded as high as $0.58, so a price target of $0.50 is certainly not out of the question.
The problem for Elephant Talk right now are that the technical indicators for the stock are sending out very mixed signals. While the 50-day moving average has crossed under the 200-day moving average (a traditional bearish signal), the 10-day moving average has crossed above the 50-day moving average (a traditional bullish signal).
Going forward, Elephant Talk is looking to consolidate its product offerings for mobile network operators (MNOs) and mobile virtual network operators (MVNOs). The company’s flagship product is ET Software DNA 2.0, which is an intelligent mobile services platform that enables companies to offer secure mobile transactions and cloud-enabled mobile services.
The basic business premise behind Elephant Talk is that the company’s offerings can help mobile network operators deliver their services better, cheaper and faster. Solutions from Elephant Talk can help these MNOs lower their time to market, decrease the cost of their services, and make their offerings more scalable and flexible.
Based on the recently announced partnership deal with Expeto, one focus at Elephant Talk appears to be movement into the burgeoning Internet of Things (IoT) market, in which all devices will be Internet-connected and “talk” with each other over mobile-enabled networks. That’s a big vision and one that could send the company’s stock higher if it actually comes to fruition.
For now, traders will continue to monitor the company’s technical indicators, the company’s embrace of emerging mobile technology trends (e.g. mobile transactions, messaging, Internet of Things), and the situation surrounding the company’s stock market listing. If the company shows signs of moving into profitability by the time of the release of Q3 earnings in November, there could be upward movement of the company’s stock headed into year-end. For more on Elephant Talk Communications, sign up for the daily newsletter from OracleDispatch.com: