McDonald's just had its worst week of the year, and a top technician says the charts point to more pain ahead.
The fast-food giant is one of the best-performing Dow stocks this year — soaring nearly 30 percent. Despite the strong performance this year, McDonald's has now fallen more than 2 percent from its recent high, hit on Sept. 11. It has lagged rivals such as Wendy's, Shake Shack and Chipotle, which were up 10 percent, 6 percent and 3 percent respectively during that time.
There was "bad action this week, and looks to me like it's the beginning of more bad action [for McDonald's]," Carter Worth of Cornerstone Macro said Friday on CNBC's "Options Action."
McDonald's has outperformed the and Russell 3000 restaurant index for the past three years, while "restaurants have been a real dud. You got three years, and you've got nothing to show for it," Worth said.
However, some of the laggards in the restaurant space are starting to show some life, and "McDonald's is giving way a little bit," Worth said.
Over the past year, "McDonald's is starting to hook down ever so slightly while the restaurants are starting to hook up. I'm going to make the bet that this is going to continue to happen," Worth said.
"My guess is that we're just going to check back to trend, so I want to fade McDonald's here. If I'm long, I want to take profits. If I'm a short-seller, I think you get a nice five to eight percent sell-off."
McDonald's was trading at the $157.41 range midday Monday.
