As tech hits new highs, one huge stock is sitting out of the rally

It's time to hit the sell button on Facebook, according to one technician.

Shares of the social media giant are up nearly 34 percent in the past year, now trading less than 1 percent away from its all-time highs. But Carter Worth, head of technical analysis at Cornerstone Macro, says there's trouble brewing in the charts.

Worth first points to a growing divergence between Facebook and the NYSE Fang + Index, which also includes names such as Twitter and NVIDIA.

"What we have of course is a great correlation that has started to not be the case," Worth said Friday on CNBC's "Options Action." "Often after a great runup, a fade or stall foreshadows more trouble."

Facebook is the worst-performing FANG stock year to date. Its shares have risen 5 percent, while Amazon and Netflix shares have rallied 37 percent and 67 percent, respectively.

Worth also noted Facebook's recent underperformance in the last four months. While the S&P 500 has risen 5 percent in that time, Facebook has gained just over 4 percent.

Furthermore, Worth pointed to Facebook's weakness relative to the overall S&P 500 tech sector.

"Its relative performance to the other choices one could have made is down," Worth explained, "That's not great. [It's] not a good setup." On Monday, both the Nasdaq and the S&P technology ETF, the XLK, hit new all-time highs.

A closer look at Facebook's trend line shows the stock slipping below its uptrend channel. Despite a retesting of those levels, Worth cautions that when stocks "hit the head" like this, it's often an indicator of more bearish activity ahead.

"I'm a seller of Facebook here," Worth advised. "If you're long and got great gains, take your money off the table."

Facebook shares were trading slightly higher, at $185.83 on Monday afternoon.

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  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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