This is the next Dow stock to plunge: Technician

Shares of Caterpillar fell to a five-year low Thursday, after the company announced massive layoffs and slashed revenue guidance. That stock alone shaved nearly 30 points off of the Dow as of Thursday afternoon.

Read MoreCaterpillar to cut up to 10K jobs; lowers guidance

But in considering the likely next move for the Dow Jones industrial average, Oppenheimer technical analyst Ari Wald is growing cautious about a different component: American Express.

The credit card giant's shares have already fallen 20 percent this year, and Wald says the stock is now showing signs of a "fresh breakdown amid a broken trend."

"After several months of moving sideways, a break of support at $76 support indicates that the stock's downtrend is resuming," Wald wrote to CNBC. "We see downside to $69."

That would represent a further decline of 8 percent. And if American Express shares were to drop by that amount, it would shave 38 points off of the Dow.

Read MoreCaterpillar dive may push these stocks into ditch

But it's not just American Express that appears vulnerable. Looking at the Dow more generally, the technician believes the recent market weakness is likely to continue.

"Stocks in the Dow Jones industrial average continue to break down one by one, and many of these stocks should remain under pressure," Wald wrote to CNBC.

When it comes to the index itself, "we believe this expanding list of breakdowns could lead to a test of 15,650 support in the coming weeks."


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Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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