Vimpel Communications (VIP) 11/3/09 PriceWatch Alert Support Down To $17.50

Posted: Tuesday, November 03, 2009 8:45 AM EDT

Vimpel Communications (NYSE: VIP) closed yesterday at $18.45. So far the stock has hit a 52-week low of $4.81 and 52-week high of $21.05. Vimpel Communications stock has been showing support around 17.50 and resistance in the 19.46 range. Technical indicators for the stock are Bullish 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 an Apr '10 15 covered call (VIP DC) for a net debit in the $14.05 area. That is also the break even stock price for this trade. This covered call has a 165 day duration, provides 23.85% downside protection and a 6.76% assigned return rate for a 14.96% 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 (OWY AU) and selling the Apr '10 15 call (VIP DC) for a $7.05 debit. The trade has a 165 day life and would provide 21.14% downside protection and a 6.38% assigned return rate for a 14.00% annualized return rate (for comparison purposes only). Vimpel Communications does not pay dividends at this time. [ATU-Seven Summits Research]

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