Intel is set to report earnings on Tuesday after the bell. But before the chip giant unveils its results, Sterne Agee chief market technician Carter Worth advises getting out of the blazing hot semiconductor stocks.
"If you've got good profits in this, take some off," Worth advised on Friday's "Options Action."
Semiconductors are one of the best-performing industries in 2014, rising 20 percent this year. And Worth says the outperformance simply can't last.
"What's important here, of course, is this outperformance of the part of the whole," Worth said. "We all know semis are a part of all technology. And you're talking about, from July '12 to July '14, a two-year run that's basically almost double that of all information technology in the S&P. So a lot of outperformance."
Worth then turns to the chart of the Market Vectors Semiconductor ETF, which trades under the ticker symbol (SMH).
Drawing a trend line, Worth explains that "this is well-defined, there's no way around it, and you're at the top of the channel."
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Semiconductor and semiconductor equipment stocks are expected to show an earnings increase of 41 percent in their second-quarter results, and Worth says "we are discounting a great deal of those prospective good earnings" on the chart.
Finally, Worth turns to his handy 150-day moving average.
Looking at the 150-day moving average, Worth notes that the (SMH) "bounces to the penny, to the penny, and it checks back, check back, checks back. And you're due for a check back."
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Michael Khouw, primary strategist at DASH Financial, is on board with Worth's bearish call.
"One of the things we've seen here is that a large portion of the price appreciation has been coming more recently from an increase in multiples from a lot of these old-line stocks that had been trading at huge discounts," Khouw said on Friday. "Well, guess what, folks: They're not at a huge discount anymore."
—By CNBC's Alex Rosenberg
Follow the show on Twitter: @CNBCOptions.
