The Coming Week: Let the Bullish Times Roll

Momentum and some solid earnings could keep the bull stampeding in an abbreviated week.
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A combination of bullish momentum and solid earnings could help stocks tack on additional gains next week, analysts say.

Even though the

Dow

has moved up in a straight line over the past eight weeks and the

Nasdaq

has advanced for six straight weeks, analysts say there's still enough good news out there to keep the rally going for another week.

"There's tremendous resilience," said John Hughes, market analyst at Shields & Co. "Every time we're down 50, 60 or 70 points on the Dow, someone steps up and buys."

Hughes said he is expecting some impressive earnings next week, which could help to buoy the market. Some 111 companies in the

S&P 500

are expected to report fourth-quarter earnings, with nine Dow components among them. Blended earnings, which include firms that have already reported results and those yet to report, show a 22.5% jump in the fourth quarter, according to Thomson First Call.

"You've still got a favorable environment out there," said Sean Martin, head trader at A. Gary Shilling & Co. "Earnings are coming in OK, and people are afraid to miss this move."

Martin said it is very unusual for stocks to rally for such a long period of time without seeing at least a 5% correction, but he isn't too concerned, at least for now. "There are warning signs out there, but the chart still says

the market is heading higher."

For weeks now, technical analysts have been saying that stocks are overbought and that investors have become too complacent. But with momentum so strong, pundits don't believe that now is the time to sell.

"The greater risk is not being exposed on the long side," said Hughes. "We're playing it where essentially you've got one foot out of the door but you're not leaving the party yet."

Dave Briggs, head of equity trading at Federated Investors, is slightly more cautious, calling for the market to edge down about 2% next week. "I'm looking for a bit of a letdown next week just to digest the gains that we've had," he said.

The stock market will be closed Monday in recognition of the Martin Luther King holiday, but Tuesday will bring a slew of fourth-quarter earnings, including the results from Dow components

3M

(MMM) - Get Report

,

Citigroup

(C) - Get Report

,

General Motors

(GM) - Get Report

,

Johnson & Johnson

(JNJ) - Get Report

and

United Technologies

.

On Wednesday,

eBay

(EBAY) - Get Report

,

Merrill Lynch

(MER)

and Dow member

J.P. Morgan

(JPM) - Get Report

are slated to report.

Then on Thursday, Dow components

AT&T

(T) - Get Report

,

Eastman Kodak

(EK)

and

Microsoft

(MSFT) - Get Report

will chime in, along with

Nokia

(NOK) - Get Report

and

Corning

(GLW) - Get Report

.

Economic reports will be few and far between next week, but investors may want to watch out for housing starts on Wednesday, weekly unemployment claims on Thursday and the Conference Board's index of leading economic indicators on Friday. Housing starts are projected to drop to an annual rate of 1.983 million units from 2.070 million in November, and the leading indicators for December are expected to rise 0.2% after a 0.3% climb in the prior month.