3 Predictions for Next Week

I went out on a limb last week, and now it's time to see how that decision played out.

• I predicted that Apple would close higher on the week. I thought some of the selling behind the world's most valuable tech company was related to investors who were trying to lock in gains given the attractive long-term capital-gains tax rates of 2012. Despite recent concerns that Android is eating Apple's lunch and that margins will be squeezed in 2013, Apple's just too cheap to be trading this low for too long. The stock ultimately moved 3.4% higher on the week. I was right.

• I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. . This has been a tricky call lately. It was a strong week for the stock market once the fiscal cliff was averted, and the Nasdaq closed 4.8% higher. The Dow, on the other hand, clocked in with a gain of 3.8% on the week. I was right.

• My final call was for AngioDynamics to beat Wall Street's quarterly profit target. The provider of minimally invasive medical devices for vascular access, surgery, peripheral vascular disease, and oncology reported on Thursday. Analysts were looking for a profit of $0.09 a share. AngioDynamics came through with net income of $0.10 a share. I was right.

Three out of three? Awesome!

Let me once again whip out my trusty, dusty, and occasionally accurate crystal ball to make three calls that may play out over the next few trading days.

1.Baidu will close out the week higher
For only the second time since going public in 2005, Baidu lost ground in 2012. The nearly 14% drop wasn't horrendous, and it's nothing compared with 2008, when shares of China's leading search engine surrendered more than two-thirds of its value.

However, Baidu's low valuation and the prospects for China's growth stocks to bounce back in 2013 make betting on a Baidu bounce a smart wager. The January effect that sends investors gravitating toward growth stocks can only help. My first call is for shares of Baidu to move higher for the week.

2.The Nasdaq Composite will beat the Dow this week
Betting on tech over stodgy blue chips was a steady winning bet for me earlier in 2012. This has been a losing bet lately, but I still think technology is the best sector to be invested in these days.

I'm going to stick with this pick. Most of the names in the composite are just too cheap at this point, and they'll be reporting quarterly results in the coming days. The market is ripe for the tech-stacked secondary stocks to continue to outpace the 30 megacaps that make up the Dow Jones Industrial Average.

3. Wells Fargo will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

Wells Fargo is one of the "too big to fail" financial-services giants. It has been growing over the years through timely acquisitions, gobbling up regional banks and even some national giants, including Wachovia.

Another thing it does is make analysts look like perpetual underachievers.If analysts say the company earned $0.90 a share in its latest quarter, I'll whip out a "greater than" sign. History's on my side!

One of my best tricks to beating the market is finding stocks that perpetually land ahead of the prognosticators. Let's go over the past year of earnings reports.

Source: Thomson Reuters.

Things can change, of course. Wells Fargo has been narrowly exceeding market expectations over the past year. Banking is still a dirty word to consumers who see the greed of the "too big to fail" banks as a major reason for the country's financial predicament over the past year. Interest rates are also so low these days that bank customers don't have much of an incentive to park their wealth at traditional institutions.

However, Wells Fargo is also smart enough to manage expectations to the point where it can land just ahead of the pros. Why bet against that trend? Everything seems to be falling into place for another market-thumping quarter on the bottom line.

Three for the road
Well, there are three predictions right there. Let's see how I fare this week.

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The article 3 Predictions for Next Week originally appeared on Fool.com.

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Baidu, and Wells Fargo. Motley Fool newsletter services recommend Apple, Baidu, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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