More losses are ahead for Home Depot, according to one noted technical analyst
The company's shares surged during the summer and only kept rising after strong earnings reports in the homebuilding sector. But now the stock is down almost 5 percent just this month alone, and Carter Worth of Cornerstone Macro sees signs of more trouble ahead for Home Depot.
Worth points out in a chart that even though the home improvement retailer was close to making new highs this year, the stock's surge has since tapered off and Home Depot is now underperforming the .
"You have a stock that attempted to make new highs and yet [is now] underperforming equities," he said Friday on CNBC's "Options Action."
What's more, Home Depot's outperformance in the consumer discretionary sector doesn't actually spell good news, according to Worth.
"Home Depot is so far above other consumer discretionaries," he said. "You have long-term outperformance, and now more recent underperformance. Not a good setup."
Home Depot is down more than 3 percent in 2016. If it ends the year with a loss, this will mark the first down year for the stock since 2008.
