Chart shows the industrials rally is running out of steam

The industrials sector is enjoying its longest winning streak in six months, but one top technician warns the rally is running out of steam.

The XLI ETF, which tracks the sector, has been on a tear, rising for the eighth straight session and gaining more than 5 percent in that period. Furthermore, in the past 12 months, the ETF has rallied nearly 13 percent, just narrowly underperforming the S&P 500's gains of 14 percent. Despite the move higher, Carter Worth, head of technical analysis at Cornerstone Macro notes how the sector has been struggling to break above a key downtrend resistance level.

"The presumption would be that we're going to hit our head and get a little down arrow here," Worth said Friday on CNBC's "Options Action." "So I'm going to make the bet that this consecutive rally right to a downtrend line is a rally to a difficult level where overhead supply comes into play."

Industrial stocks make up more than 10 percent of the broader S&P 500 index and tend to trade best in times of economic strength. However, growing concerns over a potential trade war with China have increased volatility in the space.

In the interview, Worth said that shares of the ETF were at a "critical juncture" where the downtrend resistance and 150-day moving average meet near the $75 level.

"I'm going to make a bet that it's going to fail here," Worth cautioned.

The XLI ETF, which top holdings include Dow giants like Boeing, Caterpillar and General Electric, hit an all all-time high of $80.96 in January but has fallen more than 7 percent since.

Worth also referred to a five-year chart of the industrials relative to the S&P 500, noting that despite hitting a postelection peak in November the sector has mainly been an underperformer.

"I'm going to make the bet that this rally, impressive as it is, is probably at a level where the next sequence is likely down not up," said Worth.

Shares of the XLI are down more than a 1 percent year-to-date and were trading higher Monday afternoon, around $74.50.

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