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I am making a bullish prediction for the month of December. I believe the Dow Jones will test 52 week highs by the end of the month, which is 12,876. To some, this prediction may sound crazy -- there will even be some who believe I'm overly optimistic following a rally within the market. However, I've been bullish on this market since August, and I've loaded up on undervalued stocks every time the market's fallen and presented what I believe to be value. I can honestly say that I've returned higher gains in the last 4 months than in the year by simply playing the emotion of the market.

There has been very little to validate the market's price swings and high volatility over the last four months. Some suggest it's because of Europe, and they would be correct; however, what event in Europe has affected companies such as General Motors (NYSE:GM) which has lost 30% of its value since July while posting its best sales since cash-for-clunkers? Or how does Europe affect regional banks such as Huntington (NASDAQ:HBAN), which is driven by the region in which it serves?

The truth is that the problems in Europe are devastating and could affect global trade, however, all data from the U.S. suggests the economy is growing. The largest of companies are posting record earnings and are growing at an incredible rate regardless of the problems within the eurozone. Yet, U.S. progress has been overshadowed by Europe's financial crisis, which probably affects less than 5% of all companies that trade in our markets. Therefore, the loss has been exaggerated and is more fear than fundamentals, and that the market's fear related loss will now present the perfect opportunity for large gains throughout this holiday season.

Although I'm sure that more volatility will plague the markets in the future, I strongly believe that December will provide gains as the markets react to U.S. data and set aside the European crisis. The three major indices each posted gains of more than 4% since Wednesday and it's a well-deserved gain. The private job sector added 206,000 in November and showed strong growth in small businesses and unemployed dropped below the pivotal 9%. Black Friday and Cyber Monday were at record highs, which could indicate that this holiday season will be exceptional. Additionally, third quarter productivity rose to 2.3%. However the big news is that Europe will get the funds to at least quiet the global markets for the next couple of months, which means U.S. markets can trade off fundamentals.

There are stocks being traded with large losses since July for no fundamental reason. These stocks have lost value out of fear, and speculation that conditions in Europe could carry into the U.S. There is no reason for these stocks to be trading lower, and although I doubt these stocks will regain all of their loss during the month of December, I expect that several will post large gains over the next few weeks. Therefore, I have listed several stocks that have upside of at least 20% during the month of December. These stocks are what I consider "under-the-radar" because with the recent gains in the market, investors are focused on large money center banks and other large stocks that have lost a large amount of value. The stocks below have lost value and aren't being discussed, yet investors should watch these stocks because they may just creep up and post a 20% gain without you collecting on the profits.

Chart forTravelzoo Inc. (NASDAQ:<a href='http://seekingalpha.com/symbol/tzoo' title='Travelzoo Inc'>TZOO</a>)

During the last 6 months Travelzoo (TZOO) has been crushed with a loss of 60%. During this time the stock's volume has dropped from over 1.7 million shares traded per day to under 600,000. The stock posted incredible gains and trended over $100 back in April, after posting blow-out earnings that encouraged future growth. However, like most momentum stocks, its price came falling down and is now presenting what I believe is value. The only difference between the company now and in April is that its fundamentals are much better. The company grew revenue by nearly 40% and earnings by 62% year-over-year during its most recent quarter.

However, high expectations and low barriers to entry within the industry has caused pessimism among investors. Over the last 5 days the stock's posted a gain of 6.4% and is showing resistance to trend higher despite the market's growth. I maintain that over the next year this stock will post huge gains, and in the month of December it could test $33.5, which is its next resistance. If the stock were to reach $33.5 it would be a gain of 21%, which I don't believe is unattainable. I expect TZOO to be one of the best performers of 2012 and that fear of increased competition will be silenced as TZOO grows from a global platform with less competition. The stock has a forward P/E of 16.03. I expect its actual P/E ratio to trade at 40 over the next year, considering its growth, which would be more than double its current price.

Chart forE*TRADE Financial Corporation (NASDAQ:<a href='http://seekingalpha.com/symbol/etfc' title='E*TRADE Financial Corporation'>ETFC</a>)

After seeing the 6 month chart of E Trade (ETFC) you may believe that earnings have drastically decreased, or that maybe the company has lowered guidance. But actually, the company's growing revenue at 23% and earnings of 740% year-over-year. Its margins are improving, while its debt-to-assets are declining and the company's given no indication that trouble is on the horizon. However, the stock's fallen by nearly 40% during the last 6 months which has been mostly driven by volatility within the market. Over the last 3 days the stock's posted a gain of 4.7%, and although a 4.7% gain is solid, I don't believe it's anywhere near its potential for the month of December.

ETFC is trading at nearly half of its book-value-per-share and has been highly affective at lowering its debt-to-assets ratio. Therefore, I expected ETFC to be one of the largest gainers once the market reversed. Over the last three months this stock has shown the ability to trend higher very quickly to resistance of $11.60. It's reached this point on three occasions but has been unable to break through. I expect for ETFC to reach this level once again in the coming weeks, and if so, it would be a gain of 28%. This stock has significant upside potential and is improving its fundamentals yet trading lower. A large portion of its loss came as a result of the company not showing interest in selling-- yet why would the company sell, especially when its growing at such a rapid rate? My belief is that gains in ETFC will be realized soon, and that investors who buy will be heavily rewarded.

Chart forTempur Pedic International Inc. (NYSE:<a href='http://seekingalpha.com/symbol/tpx' title='Tempur Sealy International Inc.'>TPX</a>)

Tempu-pedic International (TPX) is showing all the signs of a great investment for many years to come. It has strong growth, a large market, and high demand for its product-- yet the stock's declined by 20% since the end of October and has been slow to post gains. The stock's currently trading with a 5.4% gain over the last three days, and much like ETFC, the gains are solid but not what I expect. TPX is growing at a remarkable rate, which includes revenue growth of 30% and earnings growth of 40% yet the stock's trended lower. The stock is very volatile, which has contributed to its decline, but that same volatility is what I expected to drive the stock higher once the market reversed. However, the stock has a tendency to dip before posting gains and it has no resistance until $71. Therefore I expect TPX to reach $71 with great fundamental growth and a strong outlook, and if so, the gains would be 27% from its current price.

Chart forSodaStream International Ltd. (NASDAQ:<a href='http://seekingalpha.com/symbol/soda' title='SodaStream International'>SODA</a>)

Before the down-trend in the market, SodaStream (SODA) was trading at all-time highs with record fundamentals. This company has an incredible amount of upside and most believe its far from reaching its full potential. During its most recent quarter, it grew revenue by 39% and earnings by 275%-- in addition to adding several large vendors, which will increase sales. Overall, the immediate future looks bright for the company, but its stock is trading with a 60% loss since August 1. There's been no discouraging news or lowered guidance, which indicates to me that the loss is a result of volatility. The stock could easily trend above $40 during the month of December, however it does have significant resistance at $37, which will be difficult to surpass. The stock has reached this point on several occasions, but has been unable to trend above because of the market's volatility. I expect it to reach this level, which would be a gain of 21% from its current price.

Chart forBasic Energy Services, Inc. (NYSE:<a href='http://seekingalpha.com/symbol/bas' title='Basic Energy Services, Inc.'>BAS</a>)

The trend of Basic Energy Services (BAS) could be easily identified before the European financial crisis dragged the markets lower. Before the sell-off, BAS was trading with a one-year gain of more than 300%, but has since lost 50% of its value. Although it's gained 40% since October, I don't believe it's anywhere near slowing down. Because of this company's growth, it's worth every bit of $40-- yet it's trading at $18.25. During its most recent quarter it grew revenue by 75% and posted income of $26.6 million, compared to a loss of $9.3 million. This company has great growth potential. I think it will trade substantially higher in the long-term. However, it did rise very quickly once the market reversed in October, which leads me to believe it will once again. The only problem is that BAS doesn't have any strong resistance, therefore it will trend higher than its recent pop to $23. In fact, with its volume beginning to increase, a price of $25 is likely, which would be a gain of 37% from its current price.

Chart forIPG Photonics Corporation (NASDAQ:<a href='http://seekingalpha.com/symbol/ipgp' title='IPG Photonics Corporation'>IPGP</a>)

IPG Photonics (IPGP) fell quickly when the market began to trend lower, and so far, hasn't been able to recover. However, it's one of the fastest growing technology companies within the market. During its last quarter it grew revenue by 61.7%, and earnings by 148% year-over-year. The company had a breakout year in 2010 and is on pace to outperform its revenue by more than 50%. IPGP is showing no signs of slowing down, despite a 45% loss over the last 6 months. The stock's posted a gain of 8% over the last three days, and has no resistance until $48. I believe that IPGP will trend past $48 and test its next level at $53, which has been stronger resistance during the last three months. If the stock reaches this point, it would be a gain of 28% from its current price.

Source: 6 Under-The-Radar Stocks With 20% Upside In December