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Last week was encouraging as the markets posted gains of 7% and nearly every stock trended higher. My picks last week were solid, with all 7 trending higher and 5 outperforming the markets by a large margin. This week could be a bit tricky with the market going either way: investors may take profits or investors may buy into the rally.

U.S. data was strong last week and political leaders appear to be making progress with a resolution for the financial crisis in Europe. And although I believe the month of December will return large gains, this week has a possibility of loss. Therefore, I am looking for stocks with momentum or companies with earnings that could drive the stock higher. Below is this week's watch list of stocks that could close the week with gains.

Chart forDollar General Corporation (NYSE:<a href='http://seekingalpha.com/symbol/dg' title='Dollar General Corporation'>DG</a>)
Retail stocks have outperformed the market over the last few months by a large margin, and Dollar General (DG) has performed among the best of any retail stock. Since August 1, Dollar General has posted a gain of 30% because of its strong growth potential with consumers that constantly seek value. The stock is now trading at all-time highs and will announce earnings on Monday.

The company's been fairly consistent during earnings by outperforming expectations during 6 of its last 7 reports, and because of this year's strong back-to-school sales and holiday season sales, I believe earnings will exceed expectations and that guidance will be increased. I believe this report could be enough to send the stock above $40 on a consistent basis and towards higher gains.

Chart forHi Tech Pharmacal Co. Inc. (NASDAQ:<a href='http://seekingalpha.com/symbol/hitk' title='Hi-Tech Pharmacal Co., Inc.'>HITK</a>)
Hi-Tech Pharmacal (HITK) is my can't miss stock for the next week. The company will announce earnings on Monday and has exceeded expectations by a large margin during each quarter for the last two years. The company manufacturers and markets a large number of prescription drugs, and some OTC drugs, and continues to show accelerated growth.

The stock is currently trading at all-time highs, with a market cap of $544 million, and a P/E ratio of just 11.42. Therefore, I believe it's perfectly positioned for large gains with a low valuation in a fast growing company. And much like DG, this stock has trended against the market since August, with a 50% gain. I expect additional gains this week as the company will most likely exceed expectations and continue its trend to new highs.

Chart forVera Bradley, Inc. (NASDAQ:<a href='http://seekingalpha.com/symbol/vra' title='Vera Bradley'>VRA</a>)
Vera Bradley (VRA) has traded very volatilely with the market over the last year, yet continues to show strong fundamental growth. The company's products are must have accessories for women and the company's done a great job at creating various patterns and styles to keep its consumers coming back. I believe its earnings report this week will reflect a strong quarter and much like Dollar General, it will give strong guidance. Therefore, I expect this week to result in strong gains for VRA and that it could possibly trade back to $45 by the end of the week after earnings are announced.

Chart forCostco Wholesale Corporation (NASDAQ:<a href='http://seekingalpha.com/symbol/cost' title='Costco Wholesale Corporation'>COST</a>)
Costco Wholesale (COST) posted a sales increase of 11% year-over-year in the month of November to reflect the strong start of the holiday season. As a result, the stock posted a gain of 7.3% last week and is now trading at all-time highs. I expect that after this week COST will be trading with much larger gains after announcing earnings. The company's been hit or miss over the last few years with earnings, but I believe that because of the good start to the holiday season and the increased volume of online consumerism, COST will exceed expectations and increase guidance when it reports earnings this week.

Chart forFord Motor Co. (NYSE:<a href='http://seekingalpha.com/symbol/f' title='Ford Motor Company'>F</a>)
Ford Motor Company (F) was on last week's list and posted a gain of 11.8%, however, I believe it hasn't yet reached resistance. The company posted great sales numbers for the month of November which has seemingly reversed the trend of this stock. In October the stock reached $13 when the market reversed and I believe this level may once again be tested. I believe Ford is one of the true great American companies that will provide exceptional gains throughout the next year and that it will post large gains this week as it continues its trend higher after strong sales.

Chart forGoogle Inc. (NASDAQ:<a href='http://seekingalpha.com/symbol/goog' title='Google Inc.'>GOOG</a>)
This is the month that Google (GOOG) will break through its two year trend of trading between $450 and $600. The company has been posting incredible earnings since it began trading in 2004 but is now growing at its fastest rate and has investors very encouraged regarding its future. The stock is showing resistance to fall and is rising very quickly anytime the market posts gains. I believe that if the market trades flat this week that GOOG will create new 52 week highs.

Because the company's made too much fundamental progress to be stuck in a two year range, and now with more segments of revenue than ever before, I believe the stock is presenting value and that investors are wanting to capitalize on its growth. This week could be a breakthrough week for GOOG, if the market can maintain its position, and could result in a long trend of higher gains throughout the month of December.

Chart forPandora Media, Inc. (NYSE:<a href='http://seekingalpha.com/symbol/p' title='Pandora Media'>P</a>)
The most controversial stock on this list is Pandora (P). The stock has lost 30% of its value over the last month after posting the best quarter in its history with a surprise profit. In my opinion, the stock should've trended higher after its earnings report, but because of its downward trend the stock couldn't overcome the momentum. However, the stock's now posted a 9.44% gain during the last three days and could be in the process of reversing its trend.

As an investor, I still need to see more to decide if this trend is for real, but I do believe there is a strong possibility that this stock posts short-term gains since the stock tends to trade on momentum, and as of now, the stock's showing positive momentum.

All data regarding past and future earnings was obtained from CNBC.

Source: 7 Stocks To Post Gains This Week