It would be hard to find an investment newsletter more bullish on stocks right now than The Wall Street Digest.

"The evidence of a coming bull market liftoff continues to build. Cash on the sidelines is at record levels. In fact, there is more cash on the sidelines now than there was in August 1982, just before this great bull market began. And interest rates continue to fall. Falling rates, plus a resolution to the Middle East situation, will be very bullish for stocks and bonds."Another reason for The Wall Street Digest's optimism is the relatively low valuation of most stocks now.

"Sixty percent of the issues on the American Stock Exchange are currently trading below book value. Stocks, in general, are actually cheaper now than they were in 1974. Corporate insiders recognize this value and have been buying nine shares of stock for every one they sell. Normally, insiders - the most sophisticated and knowledgeable of investors - are net sellers of stocks. But they are very bullish now."

The Wall Street Digest expects the Dow to reach 3200 sometime in 1991. In anticipation of that event it would be buying stocks now, not waiting for a Middle East resolution. It recommends 12 specific stocks with unusual market momentum. All recently reached new all-time highs because of their "rapidly growing sales and earnings, and the prospect for much more of the same for a long time to come." The dozen:

BIOMET produces and sells joint-reconstruction implants, electrical bone growth stimulators and other innovative medical products. Latest quarter earnings rose 33 percent.

CISCO SYSTEMS is the leading supplier of systems used to build widespread communications networks and link unlimited numbers of geographically dispersed local-area networks.

DELL COMPUTER designs, manufactures and markets high-performance personal computers. Sales rose 32 percent last year.

IMMUCOR manufactures more than 55 reagents used to test blood. Sales and earnings rose 26 percent and 44 percent, respectively, last year.

SIERRA HEALTH SERVICES owns a health maintenance organization (HMO) in Nevada and provides health insurance to four surrounding states, one of the nation's fastest-growing areas.

U.S. BIOSCIENCE is developing anti-cancer chemotherapeutic drugs and other pharmaceutical products. Sales rose 143 percent last year.

VENCOR operates eight chronic-care hospitals and two acute-care facilities in six states. Latest quarterly earnings rose 200 percent.

AMGEN is a very promising bio-tech company developing human health-care products based on recombinant DNA and molecular biology.

CABLETRON SYSTEMS manufactures local-area network products and provides design, installation and support for LAN systems. Earnings rose 198 percent last year.

CANDELA LASER makes flash-lamp-excited turntable dye laser systems. Earnings rose 38 percent last quarter and the company has no debt.

LIFELINE SYSTEMS provides personal response systems that enable hospitals and other agencies to deliver 24-hour assistance to patients. Earnings have grown 500 percent-plus in each of the last two quarters.

SURGICAL CARE AFFILIATES operates outpatient surgical centers in 15 states. Earnings rose 102 percent last year.

(The Wall Street Digest, 1 Sarasota Tower, Sarasota, FL 34236; monthly, $150 annually.)

Investor's Notebook reflects the opinions of professionals. It does not endorse specific investments, and no endorsement is implied or should be inferred. For more information, contact the individual firms cited.