Since the stock's May 2010 low of $1.09, shares have been in a major uptrend, up almost 600%. The stock recently hit a multi-year high of $7.58, and the technicals point to further price appreciation ahead.

In July 2012, the stock popped nearly 25% in a week. Continuing higher from there, an accelerated uptrend line formed. In September, shares hit a high of $7.02, but encountered resistance. Soon after, the stock fell to a low near $5.73, which acted as support.

This initial trading activity marked the beginning of a "W" shaped technical formation, which if it were at the bottom of the formation, would look suspiciously like an inverse head-and-shoulders.
Surging off support in early October, the stock quickly rose to $7.02 resistance, which it unsuccessfully tested twice before falling again to $5.73 support by late October. In early-November, the stock rose off $5.73 support and quickly climbed to $7.02 resistance.

In early December, resistance at $7.02 was finally broken. During the Dec. 17 trading week, the stock hit a multi-year high of $7.58. This shortened holiday trading week, shares held near this level albeit on lower than normal trading volume.

According to the measuring principle for the small "W" shaped basing pattern -- calculated by adding the height of the pattern to the breakout level -- the stock could potentially reach a new high of $8.31 ($7.02-$5.73 = $1.29; $7.02+$1.29 = $8.31). At current levels, this target represents 14% potential returns.

This bullish technical outlook is supported by strong fundamentals. With a surge of new customers adding paid services, analysts project fiscal first-quarter 2013 (ending Dec. 31) revenue will rise 17% to $27.3 million, from $23.3 million, in the comparable year-ago quarter. For the full fiscal 2013 year, the seven analysts following the company expect that an increase in new customers will cause revenue to rise 25% to $107.2 million, from $85.8 million last year.

The earnings outlook is similarly positive. Driven by an increase in new customers for the upcoming fiscal third-quarter, analysts project earnings will rise to $0.05, from $0.04 in the same period a year-ago. For the full fiscal 2013 year, analysts expect increased demand for VoIP services will cause earnings to nearly double, reaching $0.20, from $0.11 last year.

In addition to a strong fundamental outlook, the company is in a cash-solid position with $40.1 million in available cash and no long-term debt.

Risks to consider: Because the unified communications sphere is lucrative, it is also becoming increasingly competitive. Well-established companies, like AT&T (NYSE: T), Sprint (NYSE: S) and Verizon (NYSE: VZ) have all begun offering competing voice communication services. However, these companies charge extra for messaging and web conferencing options. In contrast, 8x8 offers its customers one low-cost, all-inclusive price for its complete host of services. This low-cost strategy should continue to retain and draw customers, helping the stock stay strong.