"We've seen six consistent and powerful moves in the stock this past year," technical analyst Carter Worth said Friday on CNBC's "Options Action." Since its IPO in October of 2012, shares of Ambarella are up a staggering 1,821 percent, but it's the ferocity of latest stage of the rally that has Worth most worried. Since mid-May, shares are up more than 65 percent. "Each of these advances has lasted several weeks to up to two months with an average move of roughly 60 percent, so you see this one is a little bigger than the average."
But what makes the chart even more troubling is how steep the current rally has been, said Worth. "We've seen such a parabolic move and the stock has now come well off its uptrend line." Worth added that each time the stock has seen a similarly torrid run it's ended with a correction of an average of 21 percent.
"This is a very steep situation," said Worth, chief market technician at Cornerstone Macro. "At a minimum if you're long take some profits, and if you have the fortitude and courage to do it, go short."
To note, of the twelve Wall Street analysts who cover the stock, the average price target is $103 and the average rating is overweight, according to FactSet.
The stock rallied as much 2 percent during mid-Monday trading and hit a new all-time high of $120.77 per share.