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It will only get worse for this sector: Technician

This could be key for the rally

The financials haven't been a great place to be recently. With only a 2.7 percent rise over the past three months, they've actually been the worst-performing of the 10 S&P 500 sectors over that time frame. And according to close chart-watchers, a rebound shouldn't be expected anytime soon.

"Financials continue to underperform the market month after month after month," wrote Sterne Agee chief market technician Carter Worth in a Monday note. "And if one excludes certain very strong, large-cap, marquee names that are buttressing the sector (such as Wells Fargo, Berkshire Hathaway, American Express) things would be even worse. …Bottom line: We retain the view that Financials are not a good place to be."

Traders work on the floor of the New York Stock Exchange.
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That view was echoed on Friday's "Options Action" by RiskReversal.com's Dan Nathan, who zeroed in on shares of Bank of America.

"You have a stock right here that I think, on a technical level, it broke that uptrend that's been in place for two years," he said.

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Looking ahead to the company's earnings report, Nathan predicted that "if you get disappointing earnings or outlook when they report Q2 on July 16th, I think the stock goes lower."

So to make a bearish bet, Nathan suggests buying the July 11th weekly/August put calendar for $0.24. This two-part trade consists of buying a put (which gives the owner the right to sell a stock at a given price) that expires in August, and selling a put that expires and July 11th in order to make the trade cheaper.

—By CNBC's Alex Rosenberg

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