Big cap tech stocks are bubbling.
The Nasdaq 100 has soared more than 14 percent in the last month, putting it within a fraction of its 52-week high and less than 3 percent from its all-time high, hit in the year 2000. The move comes as the broader market has staged a vicious rally in the fourth quarter, but one technician warns that beneath the surface lies the potential for a "substantial" pullback.
"When you look at the Nasdaq 100, it's not really telling the full story," Jonathan Krinsky told CNBC's "Futures Now" on Thursday. The index is up more than 23 percent from its Aug. 24 low.
Looking at a chart of the Nasdaq 100 relative to the equal-weight version of itself, Krinsky noted that while the index is approaching a 52-week high, its counterpart is at a 52-week low. "This is a very unusual setup," added Krinsky. According to the technician, the dispersion is so rare, it has only happened six times since March 2005. In those instances, the returns were largely negative, with the index falling an average of 5 percent in the 10 days to follow. "The next risk is to the downside," he said.