Double or Nothing: 5 Boom or Bust Stocks for 2013

Shares have been badly beaten after CEO Ron Johnson's turnaround attempt floundered, attracting heavy short interest. However, Johnson's remodeled stores show promise. If Johnson's “always low price” strategy can catch on with consumers, and the company can successfully remodel more of its stores, the recent terrible trend in earnings performance could quickly change direction, prompting a rally and bringing a short squeeze that could take the shares to heights not seen in years.

Johnson's turnaround attempt has begun to eat into J.C. Penney's cash. The company might not be anywhere near bankruptcy at this point, but shares could quickly fall further if the recent string of poor earnings reports continues. Johnson has already backed off somewhat on his strategy, offering some token discounting. If this fails, even the most loyal of investors might flee the stock. Traders should watch hedge fund magnate Bill Ackman particularly close -- he's been the most vocal J.C. Penney bull out there and a large shareholder. If Ackman bails, the end could be near.

RIM has already posted great performance in the last quarter of 2012, largely on speculation that the company's new operating system -- Blackberry 10 -- could lead to a resurgence at the Canadian handset maker. If Blackberry 10 lives up to expectations, RIM's devices could become the go-to smartphones for business users once again, beating back strides that Apple's iPhone has made in recent years. There's also the outside chance that another tech company could swoop in to purchase RIM. Samsung, Facebook

, and Amazon

might be potential acquirers.

RIM's recent rally has been more of a short squeeze than anything else. Hope for Blackberry 10 remain just that -- hope. If Blackberry 10 fails to live up to expectations, RIM's days are likely numbered. Apple

and Google

powered smart phones will continue to push it out of the market, to say nothing of Microsoft's

Windows Phone 8.

Shares were trading as high as $70 in the first half of 2012, before short selling speculation pushed shares into the high $40 range. When Bill Ackman finally announced his short thesis, shares fell below $30. Ackman's short thesis is largely based around the FTC pushing the company out of business on charges of being a pyramid scheme. If Ackman fails in this endeavor, it seems intuitive that shares would trade back to their prior levels.

Ackman's price target on the stock is $0. He isn't just saying the company has a lousy business model, but rather, that the company is operating an illegal pyramid scheme. If Ackman's allegations are true, and the FTC decides to act on them, shares might soon be worthless.

Shares of this coal stock traded down over 50 percent in 2012. Demand for the company's thermal coal has declined significantly, as utilities have turned to natural gas as a cleaner alternative.

if demand for thermal coal rebounds. Rebounding natural gas prices coupled with a resurgent Chinese economy could provide the demand that Alpha Natural needs.

Coal demand has been declining for years. Natural gas prices might not head lower, but they could stay around current levels, leaving them attractive to utilities. As for China -- the Shanghai composite has rebounded in recent weeks, but many market commentators still see the potential for a hard landing.

Shares have already nearly doubled in the last few weeks. A move back to $10 would still have shares down 50 percent from the company's IPO price of $20 per share. Tiger Global took a nearly 10 percent stake in the company near its lows. The fund has already profited on the stake, but it could see further upside in the company. There's also the issue of management: The company's CEO, Andrew Mason, has been widely viewed as a failure. If Groupon opts to replace him, it could lead to pop in shares.

Groupon has had its critics since before it went public. Questionable accounting practices and an unstable business model have been the bears' primary allegations, which have seemingly been proven correct in the wake of Groupon's share price collapse. Groupon's top competitor, LivingSocial, doesn't appear to have fared much better. Amazon

-- a significant backer -- recently wrote off much of the value of its investment in the daily deals company.