Financials have been on fire this week, up 4 percent making it one of the best performing S&P 500 Index sectors. Yet one top technician warns investors should use the rally as an opportunity to get short.
"For the financial sector, we're not buying here. We see this as a sell on strength sector for the very simple fact that we expect performance in this group to remain anchored by low interest rates" said Ari Wald of Oppenheimer, on CNBC's "Fast Money" this week.
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According to Wald's chart work, bank stocks tend to under-perform as rates fall and vice versa. As Wald pointed out, U.S. Treasury bond yields are approaching the critical 2 percent level, which could give a boost to financials in the near-term.
However, he believes interest rates have capped and will likely reverse course.