The iPhone 6 has been a smashing success for Apple. But investors trying to play the latest sales data by buying stock in one of the main component suppliers might want to think again.
This past weekend, Apple reported selling an astounding 10 million iPhone 6 and iPhone 6 Plus smartphones. That's a record for the company.
(Watch: Apple: First weekend iPhone 6 sales top 10 million, set new record)
Investors hoping to be clever about the news may consider buying shares of SanDisk, the flash memory maker that is an important supplier to Apple for the iPhone's production. But with SanDisk's shares up 66 percent over the last 12 months, that may not be such a wise decision according to Gina Sanchez, founder of Chantico Global.
"There has been a ton of buying in SanDisk," said Sanchez, a CNBC contributor. "Their valuation isn't as good as it was 60 percent ago."
Sanchez says that SanDisk's fundamentals are strong, noting its debt-to-equity is only 23 percent and its revenue in the last quarter were 10.7 percent higher than they were a year ago. However, she believes the run may be over.
"If you're selling more handsets, you're going to sell more SanDisk," Sanchez said. "I would be just really careful to chase something that has gone up this much."
Richard Ross, global technical strategist at Auerbach Grayson, says the technicals fully agree with Sanchez.
"Let me put it to you simply: Do not buy SanDisk up here even though the charts still look somewhat constructive," said Ross, a "Talking Numbers" contributor. "Memory is a good way to lose money in this business. It's still a commodity. It's not different this time."
The short-term chart shows SanDisk has been able to hold the 100-day moving average this year. However, a false breakout and a big gap down in June (where the previous day's lows were higher than the following day's highs, a bearish signal) were "a shot across the bow," Ross said. "That's an early warning signal of a reversal in trend to the downside."
(Watch: Record iPhone 6 sales would have been even better if...)
SanDisk's short-term performance shows "a lot of this new iPhone baked in the cake here with this stock," Ross explained. "I would be a seller on this little grind up rally."
What's more, SanDisk's stock is now trading close to the 100-day moving average support level, currently around $96.90. "A break below the 100-day moving average around $97 is going to provide a very compelling sell signal… which sets the stage for an even faster move down," Ross warned. "Commodity businesses like flash memory [are] highly cyclical. Don't buy the top of the cycle."
To see the full discussion on SanDisk, with Sanchez on the fundamentals and Ross on the technicals, watch the above video.
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