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 Baidu (BIDU 1.02%) would close higher on the week. After shedding 14% of its value in 2012, despite continuing to post market-thumping growth results, a rebound early in 2013 seemed like a sensible call. It was. China's leading search engine moved higher on a bullish JPMorgan analyst note, and general bullishness for Chinese growth stocks. The stock ultimately moved 8% higher on the week. I was right.
• I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (^DJI 0.69%). This has been a tricky call lately. How did it play out this time? Well, the Nasdaq closed 0.8% higher. The Dow, on the other hand, clocked in with a gain of 0.4% on the week. I was right.
• My final call was for Wells Fargo (ANGO -3.67%) to beat Wall Street's quarterly profit target. The "too big to fail" banking giant reported on Friday morning, and analysts were looking for a profit of $0.90 a share. Wells Fargo came through with net income of $0.91 a share. The company did have uninspiring news about its mortgage business, but it still came through with a bottom-line beat. I was right.

Three for 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. Facebook will close out the week higher
Facebook (META 2.98%) has been storming back in recent weeks. Shares of the leading social-networking website operator closed above $30 this week for the first time in nearly six months.

Now, a breather after a hearty run like this is perfectly natural, but there's something else. On Tuesday, Facebook has slated a tech media event, where it plans to show off the things it's been working on lately.

Could be nothing. Could be just feel-good fluff. But what if the company peels back the curtain on the social search engine it's been working on? A Facebook phone doesn't seem necessary these days, but what if it rolls out better mobile monetization tools? What about the video advertising product that seems like a no-brainer?

There's a higher upside for good news than negative sentiment coming out of Tuesday's event, so my call here is that Facebook will close higher on 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 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. NetScout will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

NetScout (NTCT 2.35%) is an uptime specialist. Website operators that can't afford downtime -- from online brokers to defense organizations -- rely on NetScout for monitoring and minimizing interruptions. NetScout also offers a broad range of networking solutions.

Another thing it does is make analysts look like perpetual underachievers. If analysts say that the company earned $0.36 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. Companies have been scaling back on IT spending ahead of a spike in the costs of doing business in 2013. Despite offering a seemingly essential service, it's wise to never underestimate the desperation at a company that needs to shave IT costs to meet projections. On the other hand, have you seen NetScout's momentum? The gap between what analysts project and what NetScout ultimately earns grew throughout 2012.

Everything seems to be falling into place for another market-thumping quarter on the bottom line.