3 Predictions for This Week

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

• I predicted that Nokia (NYSE: NOK) would close out the week higher. I couldn't have been more wrong. Not only did the ballyhooed Lumia 900 launch with a software glitch on some devices that prevented online connectivity, but the Finnish handset maker also provided grim near-term guidance. Shares of Nokia were pounded, surrendering 21% of their value. I was wrong.
• I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI). It's been a strong year so far for tech stocks relative to the more diversified blue chips that make up the 30 Dow components. Well, the past week wasn't kind to the market, but it was particularly cruel to its tech stars. The Nasdaq delivered a 2.2% loss on the week, but the Dow surrendered just 1.6% of its value. I was wrong.
• My final call was for Titan Machinery (Nasdaq: TITN) to beat what Wall Street analysts were projecting on the bottom line in its latest quarter. Well, the chain of dealerships selling agricultural and construction equipment came through with a profit of $0.84 a share. The market was banking on only $0.53 a share. I was right.

One out of three? I can do better than that!

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. Apple will close out the week higher
Last week was an eventful one for Apple (Nasdaq: AAPL), as the stock blasted through the $600 billion barrier in market capitalization, making it only the second company in this country to ever achieve that level.

It didn't last long. Shares of Apple quickly succumbed to selling pressure, shedding 4.5% of its value for the entire week.

What an opportunity! Analysts continue to inch their projections higher. Over the past week, as the market was busy marking down shares of Apple, Wall Street was busy moving up their profit forecasts. Estimates calling for net income of $43.99 a share just seven days ago for this fiscal year are now up to $44.18 a share.

That may not seem like much, but the rising estimates and cascading share price now find Apple fetching just 13.7 times this fiscal year's forecast on the bottom line. I'm liking Apple's chances to bring back investors who are waiting for a correction to buy back in.

2. The Nasdaq Composite will beat the Dow this week 
Betting on tech over stodgy blue chips has been a steady bet for me all year. Why stop now? Earnings season is kicking up in earnest this week, and investors still favor tech over blue chips despite last week's stumble.

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. Select Comfort will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

Select Comfort (Nasdaq: SCSS) has come a long way since bottoming out at less than $0.20 during the darkest part of the recession. No one wanted the company's signature air-chambered mattresses. There's nothing wrong with a lumpy mattress -- and much less a cheaper traditional one -- when money is tight.

The company behind its flagship Sleep Number bed bounced back, and now shareholders are getting as good a night of sleep as its bed owners. That's not just hype. I've owned a Sleep Number bed for six years.

If analysts say the company earned $0.39 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.

The economy can turn, and suddenly no one wants to spend a few grand on a new mattress. Someone can always put out a more popular premium mattress, as even the conventional mattress companies are cranking out high-end bedding these days. Then again, none of those potential threats seemed evident during the past three months.

Everything still seems to be falling into place for another strong 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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