Trading energy's unhappy anniversary

Monday marks the one-year anniversary of the S&P 500 energy sector's all-time high of $737.09. Flash forward 12 months and crude oil has fallen more than 40 percent, sending the space tumbling 24 percent and making it the worst-performing sector over that period. And according to one top technician, the charts suggest even more pain.

"The conclusion is that energy stocks as a group, as a theme, as a sector are likely to continue to underperform the overall market—just as they did last week, last month, the past two months, 12 months, two years and five years," technical analyst Carter Worth said Friday on CNBC's "Options Action."

Breaking down the chart of the energy ETF, ticker symbol XLE, Worth said that both the short- and long-term trends appear to be broken. "The presumption is that we are going to reapproach the prior lows, which comes in around $71.70." The XLE hit a 52-week low in mid-January and has rallied roughly 7 percent since then.

Additionally, said Worth, "We saw this bull market move off the 2009 low, but now we're toying with and starting to break below not only the minor trend-line, but the five-year trend-line."

Comparing the energy sector to its underlying commodity, crude oil, since 1989, Worth noted the magnitude of the recent disconnect. "While there's almost always a divergence between the stocks and the commodity, [this] divergence is particularly wide and present," said Worth, head of technical analysis at Cornerstone Macro. And despite crude's recent rally, Worth said, "Either crude needs to come up substantially or energy needs to come down."

"We'd be sellers of the energy space," he concluded.

Crude oil was down nearly 1 percent early Monday while the XLE was up by the same percentage.

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