Materials have made a major reversal this month.
The sector — made up of chemical companies, miners and various construction material manufacturers — has fallen more than 5% in September, on pace for its worst monthly performance since March 2020.
As raw costs continue to rise, there is some hope within the group, which has underperformed the S&P 500 on a relative basis since May, Inside Edge Capital Management founder Todd Gordon told CNBC's "Trading Nation" on Wednesday.
His top pick was the stock of Albemarle, the world's largest lithium producer.
"Demand expectations are strong as the world is going to [electric vehicles]," which use lithium in their batteries, Gordon said.
The company told shareholders at its recent investor day that it expected electric vehicle demand to grow tenfold by 2030 and lithium demand to increase at a compounded rate of 30% for the next four years.
"The daily chart looks solid as we've double bounced from about $210," Gordon said. "We also held the 50-day moving average. The relative strength of Albemarle versus S&P has been moving up since July. We sort of leveled off and I'm wondering if we'll have another leg up."
Albemarle traded nearly 3% higher to just under $230 a share early Thursday.
Increasing materials prices have created some potential bottom-fishing opportunities in another sector, Gradient Investments President Michael Binger said in the same interview.
"The increases there are really hitting industrial margins hard in the short term," he said. "The trick is which companies can pass these costs onto their consumers over an extended period of time as they try to recoup these margins?"
Though industrials are facing several roadblocks in their search for upside including rising raw costs, the prospect of Fed tapering, an infrastructure bill "seemingly stuck in Congress" and concerns around peak growth, some names "look interesting" after bottoming, Binger said.
"A couple we like are Honeywell and 3M. However, I wouldn't be buying ahead of earnings calls next month until we know more about their outlooks for the back half of the year in '22," he said. "So, the bottom line is don't be in a rush to step into the industrials sector right now. Wait and hear what they have to say."