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.
11 Responses to Scouting For Underperformers, Part II
Still holding your WNR?
That’s Space Alien Magician stuff right there.
So if you see sector turning around, do you buy top 5 in sector or just leader?
Thank you for sharing your information.
2 or 3 stocks will suffice
I’d look for a weekly 3 month weekly stochastic on the bottom turning up with a bump in volume. Look for one with solid bottom formation and still cross your fingers because it’s still a casino run by ill-willed robots.
Mr. Market’s loss has been cut in half (futures down only six and change) – this is probably a good spot to put out some shorts.$SPY
Want to talk about a nice short sided play? Look no further than EXEL. 25% of float has been held short for 3 years and stock remains near lows in a sector (bio) that has screamed higher in said time.
Trading near a BILLION market cap right now. $350mm in debt, only $10mm in projected revenue for drug that was just approved and Motley Fool/Seeking Alpha have been BIG BULLS on it for a long, long time (best contrarian indicator out there). No need to mention that the daily, weekly and monthly charts on it are horrific…but I will. Tic Toc.
That’s it? That’s not enough info to whore your short.
Looks like the target will be reached today!
DECK-Options imply at least $43.86 target by Feb. 15, 2013
I have crossed my fingers (and toes) so much over the years that I have a large callous on both hands (and both feet).
This is excellent, Fly. Much appreciated.