3 Predictions for the New Week

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

• I predicted that JinkoSolar (JKS -0.44%) would move higher on the week. The Shanghai-based solar company was reporting quarterly results on Tuesday, and it had been bottom-line beats in recent outings. It wasn't a great report, but a bullish analyst note helped the longs win out. The stock moved 8% higher on the week. I was right.
• The Dow Jones Industrial Average (^DJI 0.27%) had been clobbering the Nasdaq Composite through April and early May, but I still think the tech-centric Nasdaq is the place to be. My second prediction was for the Nasdaq to beat the Dow on the week. It happened. The Nasdaq Composite climbed 1.4% on the week. The Dow moved 0.7% higher. I was right.
• My final call was for Michael Kors (CPRI 0.45%) to beat Wall Street's income estimates in its latest quarter. The fast-growing distributor of luxury handbags and accessories had beaten analyst targets consistently over the past four quarters, and I was banking on a repeat performance. We saw it close out the quarter with a profit of $0.78 a share. Analysts had been projecting net income of $0.68 a share. I was right.

Three out of three? I call that a pretty good week!

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. Netflix will move lower on the week
There was no "sell in May and go away" for Netflix (NFLX -0.81%) investors. The stock was one of the market's biggest winners, soaring 30% last month. 

There are certainly plenty of reasons to get excited about Netflix and its market leadership position in the booming realm of premium video streaming. A growing catalog and recent price increase for new members should keep existing subscribers close.

However, Netflix has a history of correcting after major moves up. It seems ripe for a pullback before it resumes its rightful upward trajectory.

My first call is for the stock to move lower for the week. 

2. Nasdaq will beat the Dow this week
I've routinely picked the tech-heavy Nasdaq Composite to beat the Dow Jones Industrial Average, and it was a bad bet through most of March and April, but it's been rolling in recent weeks. I'm going to stick with it again for a repeat performance. My second call is for the Nasdaq Composite to beat the Dow Jones Industrial Average for the week.

3. Ambarella will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others. Ambarella (AMBA -1.42%) is a fast-growing provider of video compression chips. Its solutions power GoPro wearable cameras, Dropcam surveillance systems, and other products.

Another thing it does is make analysts look like perpetual underachievers. If analysts say the company rang up a profit of $0.21 a share in its latest quarter, I'll argue that it held up better than that. 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. The market for video compression chips can intensify, and the wearable GoPro juggernaut is showing signs of peaking. GoPro revealed in its prospectus that revenue slipped in its latest quarter. 

That's all stuff to keep in mind down the road, but not now. Everything seems to be falling into place for another market-thumping quarter on the bottom line.