Financials have been on fire this week, up 4 percent making it one of the best performing S&P 500 Index sectors. Yet one top technician warns investors should use the rally as an opportunity to get short.

"For the financial sector, we're not buying here. We see this as a sell on strength sector for the very simple fact that we expect performance in this group to remain anchored by low interest rates" said Ari Wald of Oppenheimer, on CNBC's "Fast Money" this week.

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According to Wald's chart work, bank stocks tend to under-perform as rates fall and vice versa. As Wald pointed out, U.S. Treasury bond yields are approaching the critical 2 percent level, which could give a boost to financials in the near-term.

However, he believes interest rates have capped and will likely reverse course.

Since 1980, interest rates have been in a downtrend making it difficult to support the recent bounce in banks. By Wald's chart work, treasuries have been falling off a cliff for the past "2-year, 8-year, and 30-year" periods.

According to Wald, U.S. government debt looks attractive in comparison to the ultra-low rate environment in Germany and Japan. But with global growth concerns looming, "U.S. Treasuries are in a position to play catch-down."

In fact, the recent surge in the S&P 500 financials sector are part of a bear market rally. Financials have rallied 14 percent since recent lows. Investors should sell at $22.90 level, which marks an important retracement of decline, and near the falling 200-day moving average, said Wald.

"The best case is if rates moving sideways, a market performer. I just don't see the risk-reward there when the trends don't support that just yet" said Wald.

—By CNBC's Re-Essa Buckels