Consumer discretionary stocks have been by far the best performing group in the S&P 500 this year. The sector is up more than 10 percent year to date, compared to the broader index which has dipped into the red for 2015.
However, one technician is watching a divergence in the charts that could mean the outperformance won't last much longer.
"It's been a tale of two charts here," Rich Ross of Evercore ISI said Thursday. "[Consumer discretionary is] up 11 percent year to date, but that doesn't tell the whole story."
Looking at the ETF that tracks consumer discretionary stocks (XLY), Ross said the capitalization-weighted fund has been carried higher by its top holdings Amazon, Walt Disney and Home Depot, which are up 113 percent, 17 percent and 26 percent for the year, respectively.
But problems in the retail space could actually drag down the broader sector heading into 2016, Ross said. The equal-weighted ETF that solely tracks retail stocks (XRT) has fallen more than 7 percent this year.
"More broadly speaking, retail has some issues here, and you're asking a lot of a very small group of stocks to continue to carry this space. I don't think it will," Ross said on CNBC's "Trading Nation."
From a technical standpoint, Ross also pointed out that XLY returned back above its 100-day moving average, while XRT has been unable to break through its moving average for several months.
Going into 2016, retail will likely remain under pressure from warmer weather affecting sales, as well as a potential increase in interest rates, Ross said.
"Over the next 52 weeks we have a view of mid-50s in crude for next year," McDonald said Thursday on "Trading Nation." "That's a headwind for the consumer, so over the next year although its a sector that had a good 2015, I don't see as good of a 2016."
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