4 Potential Top Performing Stocks for 2012: WMT, HD, ABOT' LSTG

I cannot remember the last time a 3% rise in the S&P 500 was met with such indifference. We all know the drill by now: stocks slump for weeks, then offer what amounts to a glimmer of hope to investors — only to slowly eat away at the gains in the days and weeks that follow…

However, if you dig through the rubble of the stock market this week, you’ll notice several names that are defying the sloppy, trendless action. Despite the seemingly never-ending eurozone crisis, big money is buying several blue-chip names that could become the new market leaders once the dust clears.

Here are a couple of my pre-season candidates that could be top performing during the first half of 2012:

Wal-Mart Stores Inc. (NYSE: WMT): The king of discount retailers is dominating the market this month. The stock is posting new highs again today, and could be ready to begin another impressive run like we saw from late September through mid-November. WMT’s climb makes sense during the current economic climate. In uncertain times, money will most likely flow to industry leaders. Add in the fact that Wal-Mart is a discount retailer, and you have the makings of one of the few sable plays that can outperform in any climate:

The Home Depot Inc. (NYSE: HD): By the looks of this chart, one would think the housing bubble never burst and we were in the midst of a powerful bull market. Home Depot has impressed me with powerful upside moves — notably yesterday and a couple off days before the beginning of December. Volume is incredibly bullish and orderly consolidation in the days following the large surges give buyers the opportunity to pick up shares without chasing the price:

Penny Promotions

[Editor’s note: In this section of Market Movers, we expose stocks that are currently the subject of promotional material. If you’re unfamiliar with promotions, pumps and dumps, or other penny stock scams, please take the time to read this column before continuing. Unless you are an experienced trader, we recommend that you avoid these stocks at any price.]

Abot Mining Co. (OTC:ABOT): ABOT has definitely been the spam stock of the week. Every newsletter on the planet is pumping this stock — and it has yet to make a significant move. That should tell you something right away. If a stock with that much money behind it fails to hold its initial move, it’s time to walk away. Right now, ABOT is trading for a little more than 4 cents per share. I wouldn’t be surprised if this stock gets cut in half before Jan. 1.

Lone Star Gold Inc. (OTC:LSTG): Since gold has sprung back to life this week, it’s no surprise names like LSTG are getting pumped again. Junior miners are always a favorite target for pumpers because it’s so easy to manipulate the language in promotional material. The bottom line is anyone can put out a press release saying that they are looking for gold — but that doesn’t mean the company is sitting on anything of value. Adding to the obvious, LSTG is showing weaker bounces and lower lows with every promotion.

I suspect it will have much farther to fall from these levels: