VIP ==> The Spring is Here Winner!

[mrmarket]

Great Motley Fool article on Vimpel

VimpelCom Is No Wimp
By Dave Mock
April 12, 2007
Russian cellular service provider VimpelCom (NYSE: VIP) gave investors good reason to crack open another bottle of vodka today -- its fourth-quarter and year-end results show the same powerful performance that has more than doubled its share price in the past year.

First, let's look at the good news in the big picture:

Yearly revenue increased 51.6%, to $4.868 billion.
Net income totaled $811.5 million, a 31.9% increase from 2005.
Operating cash flow was up 51.8%, to $1.971 billion, yielding free cash flow of $459.2 million for the year.
VimpelCom is doing a bang-up job of scaling growth in the face of major competitor Mobile TeleSystems (NYSE: MBT). The company added 10 million new customers last year, ending with more than 55 million overall. While its size pales in comparison to foreign behemoths China Mobile (NYSE: CHL) and Vodafone (NYSE: VOD), the 21.4% yearly growth is what counts. The new customers were split between Russia and other countries in the Commonwealth of Independent States, such as Kazakhstan (1.8 million additions) and Ukraine (1.6 million additions), where VimpelCom will focus for continued subscriber growth.

Read more at The Motley Fool

[skiracer]

and where the SPIL pick that Ski and I both liked also is looking pretty good.

Ah well, who knew the Russian government would dispute the taxes of a highly profitable telecom business? (ah well, at least they ARE highly profitable still)

Jiesen,
Do you own SPIL? I like it alot and may have missed the boat waiting for a lower entry. There's plenty of potential there for sure.

[jiesen]

Here's where the straddle play I suggested looks great.

and where the SPIL pick that Ski and I both liked also is looking pretty good.

Ah well, who knew the Russian government would dispute the taxes of a highly profitable telecom business? (ah well, at least they ARE highly profitable still)

[mrmarket]

Looks like I dodged a bullet. I love it when the market reacts the way it is supposed to!

[skiracer]

They missed expectations. It's going to get punished today. I need to start looking at lower PE stocks as these high flyers that miss earnings are killing me!

It's only down 3.8 from your entry of 98.80. That 3.846%. Not even to my limit yet but if you feel that it is going to get punished today or moreso even over the next couple of weeks where the damage caused by missing earnings expectations is not going to be recoupable over your desired time frame or longer then why not bail today as soon as you see which way the wind is going to blow. I really do think there is some merit to this line of thought for the trade right now. I would give it a half hour to see what is going on first. Put the cash right back into something you feel better about. SPIL is approaching a nice entry point if it goes to 10/10.25 levels.

I'm still holding that short play from 95.90. It's down 2.70 in the pre-market to 92 level. That's down almost right at 7% now. Sorry Ernie and the rest of you guys. Very dangerous buying right in front of earnings like this and relying on the report to support your expectations. Having an exit plan and point is primary especially in front of earnings like this trade. But you know what we all do it at some point and the pre-market doesn't mean anything. See what it does at the open.

I covered the short play at 92.50 almost right off the bat this morning. Some of the most erratic trading spikes and drops I've seen in a short concentrated time frame this morning. Before I could pull the trigger it went from 91.50 /92.50 range in what seemed like seconds. I don't see what would drive it up from here with it missing on the report. I haven't even read the report or heard what it was. Over 7 points gained in the two short plays over two days. I hope it goes back over everyone's entries but I don't see it.

[New-born baby]

Here's where the straddle play I suggested looks great.

[mrmarket]

I have to agree with Spike wholeheartedly. Has anyone heard anything on the time of the report tomorrow? I'm still holding the short play.

They missed expectations. It's going to get punished today. I need to start looking at lower PE stocks as these high flyers that miss earnings are killing me!

[skiracer]

I have to agree with Spike wholeheartedly. Has anyone heard anything on the time of the report tomorrow? I'm still holding the short play.

[spikefader]

...having said that, if the earnings are way out of line, positive or negative, it will have a definitive impact on the stock price, which is something the technicals really don't weigh in on.

But just say in the days/weeks prior to the earnings date there's heavy insider trading based on leaked earnings info data - to funds or heavily invested individuals who have an ability to manipulate price action by the sheer volume they trade - and that trading activity leads to "technical" support areas being broken or the formation of bearish "technical" patterns, and then there's the release of bad earnings news ....... haven't the technicals "weighed in on" and correctly anticipated the bearish move that followings the public release of the bad news?

Some people might believe to their dying day that technicals can only ever follow fundamentals, the public release of news, or significant fundamental events in a company..........they assume that technicals are only reactive to fundamental data and events. But in reality the control of information in our society, it's public release, is very much at risk of being corrupted or spin-doctored. In reality, technicals are a very good way to forewarn the release of bad news; in the form of whispers from the charts.

Let's face it; people are people, and we free and financially powerful capitalists are prone to the temptations to lie, cheat, exploit, and steal. Fundamentals of a company are one thing; the reality of market life or the reality of people is another.

Technicals can work the other way too; for good news. Corrupt leaking of good info leads to early insider buying by any who participate in illegal insider trading. The official release of the good news is met with buying liquidity offered by Joe Bloggs and astute FA fundamentalists participating in the good fundamental news, bullish strength to which the corrupt ones sell into, booking their profits, and content to sink the stock price on the good news; much to the dismay of reasoning fundamentalists and the Average Joes who act on the logical expectation that good news should be bought. But in reality, that is never a guarantee in our corruptable world. The truth offered by people is not as it seems.

Yet for technical analysis, 3 guaranteed and undisputable truths exist.
1) support is support until it isn't,
2) resistance is resistance until it isn't and
3) The trend is your friend until it isn't.

Truth that exists in a chart is self-evident and undeniable.

Now, with all that said, it may be hard to find the truth in a chart; but it doesn't mean that it's not in there. My contention is that the trained/experienced eye can spot the crucial areas in a chart and act on it profitably.

But it should always be remembered that TA isn't about being 100% correct on any particular offered bias; for the market breaks patterns and proves TA bias wrong many times over. TA is about identifying trends and major turning points, or potential turning points, support and resistance, and profiting by making sensible risk/reward trades relative to those things.

In my humble opinion, TA very much does weigh in.

[skiracer]

Actually I was making more of a general point. While there is no doubt that the technicals divulge the psychology of the market, what they simply cannot tell you is what this company's earnings are going to be when they report tomorrow.

Having said that, if the earnings are way out of line, positive or negative, it will have a definitive impact on the stock price, which is something the technicals really don't weigh in on.

When are earnings going to be reported? I hope that it works out for you in the long run. For the time being I shorted it again this afternoon at 95.90 and am still holding the play. I think it moves down farther by the end of the day to break 94. I'm giving it some room to breathe before I rush out and cover the trade but I won't be giving all of today's gains back either. I really think it could see 90/92 levels.

[mrmarket]

Ernie,
That was another item that I had in the back of my head over the last few days since you made it one of your top 5 and then the #1 pick. I also agree with NBB's take and reasoning about several of the points he illustrated. I never said that the stock wouldn't eventually do what you expect it to but just at this time in it's cycle that I thought it needed to correct and consolidate some before moving further up. Anyway I didn't list every technical point in my analysis of why I though this would happen but that chart and what I posted were the main reasoning behind the play. I have found that regardless of the techinical wave counts and other technical indicators which may or may not be pointing up this type of action, such as yesterday's, takes place when a stock gets overextended. From the 50 range this stock hadn't really corrected at all except for a blip between 90 and 75/80 levels. But in coming back from that, even after the correction of 10 points or so over the next few days, it really never mustered up the steam it had before that correction and the ensuing couple of weeks provided gains but, if you look at the daily chart you will see what I mean, it was gappy and sporadic and although made further upward movement it seemed to me that it was losing strength and stalling. This is exactly what I look for in these types of patterns and cycles. Dropping like it did the day before reporting earnings is just another commonplace occurence with these big gainers from reporting date to reporting date. That fact only reinforced my feelings about keeping a close eye on it for the enusing drop. When it broke up at yesterdays open and then within the first half hour it faltered and began to slide I felt that it was going down. I was lucky in that I was watching and waiting for it to happen because of what I have written above. Good luck with it Ernie. This is only a technical blip on the screen and in it's cycle that I was lucky enough to catch. I feel certain that after this correction, and my feelings are that it will move farther down today, it will move higher above 100 and closer to your expectations on the long side. Nothing more than that although I loved SPIL and thought it was a much better play for a number of reasons. Ed

Actually I was making more of a general point. While there is no doubt that the technicals divulge the psychology of the market, what they simply cannot tell you is what this company's earnings are going to be when they report tomorrow.

Having said that, if the earnings are way out of line, positive or negative, it will have a definitive impact on the stock price, which is something the technicals really don't weigh in on.

[skiracer]

That's pretty thorough analysis Ski. When earnings come out tomorrow, don't you think a lot of this analysis will get overwhelmed, one way or another?

Ernie,
That was another item that I had in the back of my head over the last few days since you made it one of your top 5 and then the #1 pick. I also agree with NBB's take and reasoning about several of the points he illustrated. I never said that the stock wouldn't eventually do what you expect it to but just at this time in it's cycle that I thought it needed to correct and consolidate some before moving further up. Anyway I didn't list every technical point in my analysis of why I though this would happen but that chart and what I posted were the main reasoning behind the play. I have found that regardless of the techinical wave counts and other technical indicators which may or may not be pointing up this type of action, such as yesterday's, takes place when a stock gets overextended. From the 50 range this stock hadn't really corrected at all except for a blip between 90 and 75/80 levels. But in coming back from that, even after the correction of 10 points or so over the next few days, it really never mustered up the steam it had before that correction and the ensuing couple of weeks provided gains but, if you look at the daily chart you will see what I mean, it was gappy and sporadic and although made further upward movement it seemed to me that it was losing strength and stalling. This is exactly what I look for in these types of patterns and cycles. Dropping like it did the day before reporting earnings is just another commonplace occurence with these big gainers from reporting date to reporting date. That fact only reinforced my feelings about keeping a close eye on it for the enusing drop. When it broke up at yesterdays open and then within the first half hour it faltered and began to slide I felt that it was going down. I was lucky in that I was watching and waiting for it to happen because of what I have written above. Good luck with it Ernie. This is only a technical blip on the screen and in it's cycle that I was lucky enough to catch. I feel certain that after this correction, and my feelings are that it will move farther down today, it will move higher above 100 and closer to your expectations on the long side. Nothing more than that although I loved SPIL and thought it was a much better play for a number of reasons. Ed

[New-born baby]

Ski the artist

That's pretty thorough analysis Ski. When earnings come out tomorrow, don't you think a lot of this analysis will get overwhelmed, one way or another?

Thanks for the chart & response Ski. Nice work. I think I am right when I say you can spot a bear call a mile away. (99% of the time anyway).

This is what I think we should realize: Ski played it by instinct ("I felt is was going to correct here"), and like Jessie Livermore, he's something of a stock trading artist. (Livermore in 1929 made over $100 million over a weekend shorting the market. I might add that a skilled skier is something of an artist, too). But what we less instinctive traders could have been looking at was the fact that VIP is going to report tomorrow, and usually there is selling before the report to avoid being caught in a stock during a premarket selloff. Another indication for a VIP short is the $100 marker. It is a psychological barrier, and a lot of people take profits at/near $100. Once a stock clears that hurdle, it can go on. One can even scan for stocks approaching $100 and look for a setup to short.

Congrats to Ski for the big profits today. He's a good trader, and I like to read his charts: the guy makes money! Thanks for posting.

[mrmarket]

That's pretty thorough analysis Ski. When earnings come out tomorrow, don't you think a lot of this analysis will get overwhelmed, one way or another?

[skiracer]

I like your charts, Ski. Keep 'em coming.

Specifically, what caused you to short VIP? What signalled the short? An indicator, chart formation, etc?

I tried to explain it the best way that I could NB. I like the stock to go over 100 and maybe even 105 or more like Ernie expects but right now I felt it was ready for a corrective phase and I based that on what I have written on the chart. The all must correct. My feelings are that the buyers in at the first and largest ranges of buying, inbetween the bottom line and the 2nd line are the 1st to start their exit as they have been in the longest and have the largest gains. Once the stalling effect starts they are the first and the largest group to start taking their gains. Each successive level has it's own number of shares that could be sold off in profit-taking. And this is what took place today. Now this stock will have to come down to where it is reasonable priced again to stimulate buying interest. I think it drops farther. Like I said you have to be watching and on the alert because at some point they all become overextended to varying degrees and present this type of opportunity. It doesn't happen everytime but a large percentage of the time this is exactly what takes place and what I have observed through my own experience. The biggest difference with me is that I believe in my take on what I see or feel, I came to play, and am not afraid of making the play as my losses will never, very seldom, ever go over 7 % but the gains can be much much greater. I see these setups all the time and feel that it is just a matter of watching and being tuned into the possibility and then making the play when you see it start to materialize. Not real technical chart stuff but real in that these situations present themselves all the time and happen quite frequently. If you remember FMD was another 5 + point short play that materialized the same way in the same type of pattern over the course of one trading day. Don't ever discount the fact that there is always a certain amount of racing luck involved.