In the first part of this post, I highlighted industries that have underperformed the SPY over the last 12 months. What I am looking for is the next housing sector or the next solar surge, but in something that is currently being discarded. I put together a watchlist consisting of one stock per industry for all of the underperforming industries that was highlighted before.

What you want to look for is a total sector turn around, not industry outlier. You don’t want to get lucky with one stock that magically outperforms all others. That’s a very hard trade. The easier trade is to buy into a sector that is undergoing revival. Unfortunately, it is extremely hard to time fundamental turn arounds by looking at the numbers. However, you can act upon technical improvement and cross your fingers for the fundies to catch up later.

Here is the watchlist.

If you start to see outperformance in any of these names, investigate further into their respective sectors and see if a high tide is prepping up all boats. Members of The PPT can track this watchlist here.