J2 posted a 52-cents-a-share earnings beat that sent shares rallying 2.6% by the close of trading on Tuesday.
J2 is currently in the process of splitting itself into two entities. Shah explained that their spin off, Consensus, is currently a document transfer business that people can think of as fax in the cloud. The service is primarily used to move medical documents securely, but the new company is moving towards a more data-centric model for transferring medical data of all kinds. Consensus currently generates $340 million in revenues with 55% gross margins.
The remaining J2 Global will be a digital media company with a very clear focus and dedicated management. J2 has already proven that they know how to monetize audiences and the company has big plans for continued growth.
We looked at JCOM on May 3 and wrote that "I would have a flexible strategy for JCOM this year. Prices are a little vulnerable in the short run with a downside price target on the daily Point and Figure chart. Longer term we could see significant gains. Let's look for a buying opportunity in the weeks ahead."
Let's check on the charts of JCOM again.
In this daily bar chart of JCOM, below, we can see that prices broke below the rising 50-day moving average line and then rallied back above it. The daily On-Balance-Volume (OBV) line moved up to a new high last month and is foreshadowing new price highs I believe. The Moving Average Convergence Divergence (MACD) oscillator is pointed down towards the zero line but narrowing towards a possible bullish crossover.
In this weekly Japanese candlestick chart of JCOM, below, we can see a large lower shadow in the first week of May telling us that traders rejected the lows. Prices are trading above the rising 40-week moving average line.
The weekly OBV line shows a recent uptick. The weekly MACD oscillator is crossing to the downside but this could be a short-lived take profit sell signal.
In this daily Point and Figure chart of JCOM, below, we can see a $142 price target. A dip to $115.37 could weaken the picture.
Bottom line strategy: The charts and indicators of JCOM have improved in the past week. Traders could go long JCOM on a one or two day dip. Risk below $115 with the $142 area our price target for now.