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By Simon Avery

Canaccord Adams has released its outlook for 2010, entitled “Hope on the Horizon.”

The 116-page report says there is a chance of a 20% drop in the market, most likely in the first half of the year, but the firm advises against waiting for a correction because of the risk of missed opportunity. It says the real impact of government stimulus will hit in the first half of 2010 and interest rates will start to rise in the second.

Our outlook can be summarized as the potential for near double-digit gains, possibly more. The risk, in our mind, is to the upside. Our caveats are as follows: We do not foresee a G10 sovereign debt downgrading, we do not foresee a crash in the U.S. dollar, and we do not believe hyper inflation or deflation will rear their ugly heads. But they are all possibilities in 2010. Just the probability of these events is significantly lower than what we have projected for double-digit gains,” the report says.

Canaccord’s list of picks for 2009 are up 59% over the year. Here’s what’s on the 2010 list:

Algonquin Power, Avion Gold, Barrick Gold (NYSE:ABX), Brookfield Properties (NYSE:BPO), Calfrac Well (OTCPK:CFWFF), Cap REIT, Capstone Mining (OTCPK:CSFFF), Exeter Resources (NYSEMKT:XRA), HudBay Minerals (HBMFF.PK), New Gold, Newalta Income (OTC:NALUF), Nexen (NXY), Pacific Rubiales (OTCPK:PEGFF), Potash Corp. (NYSE:POT), Progress Energy (NYSE:PGN), RIM, SNC Lavalin (OTCPK:SNCAF), Uranium One (OTC:SXRZF), Western Coal and Yamana Gold.

Source: Canaccord Adams: Bullish on 2010