VimpelCom Ltd (ADR) : A resistance as obstacle
Entry price | Target | Stop-loss | Potential |
---|
US$9.41 |
US$0 |
US$9.75 |
+100% |
---|
VimpelCom, the provider of telecommunication services based in Amsterdam, is meeting an important level so we suggest caution because this point could stop the bullish trend.
From a fundamental viewpoint, firstly, we note the high valuation of the company. With a valuation ratio of 1.87x, the group appears overvalued compared to its business activity. Regarding the financial situation, leverage is at 2.51x. Debts are estimated at USD 23448M for the current year.
Technically, the proximity of the USD 9.5 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario.
Therefore, the most offensive investors can benefit from the technical configuration to take a short position. The objective will be fixed near to the USD 8.4 support. Only the breakdown of this level would open up new bearish targets toward USD 7.2. The stop loss will be set above USD 9.5.
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