Vimpel Communications (VIP) 2/9/10 PriceWatch Alert Shows Bearish Technicals

Posted: Tuesday, February 09, 2010 8:44 AM EDT
By: Market Intelligence Center Staff

Vimpel Communications (NYSE: VIP) closed yesterday at $16.75. So far the stock has hit a 52-week low of $4.81 and 52-week high of $22.55. Vimpel Communications stock has been showing support around 15.99 and resistance in the 17.97 range. Technical indicators for the stock are Bearish and S&P gives VIP a neutral 3 STAR (out of 5) hold rating. VIP appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jul '10 15 covered call for a net debit in the $13.75 area. That is also the break even stock price for this trade. This covered call has a 158 day duration, provides 17.91% downside protection and a 9.09% assigned return rate for a 21.00% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the VIP Jan '11 7.50 Call and selling the Jul '10 15 call for a $7.05 debit. The trade has a 158 day life and would provide 13.13% downside protection and a 6.38% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). Vimpel Communications has a current annual dividend yield of 1.44%. [ATU-Seven Summits Research]