NEW BULLISH Plays

Genuine Parts Co. - GPC - close: 48.53 change: -0.31

Stop Loss: 46.85
Target(s): 51.50
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes

Company Description:
Genuine Parts Company is a distributor of automotive replacement parts in the U.S., Canada and Mexico. The Company also distributes industrial replacement parts in the U.S., Canada and Mexico through its Motion Industries subsidiary. S. P. Richards Company, the Office Products Group, distributes business products nationwide in the U.S. and Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S., Canada and Mexico. Genuine Parts Company had 2009 revenues of $10.1 billion. (source: company press release or website)

Why We Like It:
This auto parts distributor is on the move again. After more than a month of consolidating sideways and digesting gains in the $46.75-48.50 zone GPC is breaking out. I am suggesting we launch new bullish positions now. We'll target the 2007 highs under $52.00. Readers may want to buy the call options to leverage this move. FYI: The point & figure chart is bullish with a $52 target.

Suggested Position: Buy GPC stock at current levels.
- or -
Buy the 2011 January $50.00 calls (GPC1122A50) current ask $0.70

Annotated chart:

Entry on November 29 at $xx.xx
Earnings Date 02/16/11 (unconfirmed)
Average Daily Volume: 763 thousand
Listed on November 27th, 2010


World Acceptance Corp. - WRLD - close: 45.45 change: +0.32

Stop Loss: 40.75
Target(s): 47.25, 49.75
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description:
World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 1,034 offices in eleven states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry. (source: company press release or website)

Why We Like It:
The financial sector has been underperforming the market these past few weeks. Yet shares of WRLD are surging and ready to challenge their 52-week highs. I like WRLD's relative strength and suspect this stock could be testing its all-time highs near $50 in the next couple of months. Instead of chasing the stock now I am suggesting a trigger to buy WRLD (or calls) at $44.25. More conservative traders could wait for a dip closer to $43.00-42.50 instead. Our first target is $47.25.

TRIGGER @ $44.25

Suggested Position: Buy WRLD stock @ 44.25
- or -
Buy the 2011 January $45 calls (WRLD1122A45) current ask $3.30

Annotated chart:

Entry on November xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 122 thousand
Listed on November 27th, 2010