Disappointing sales and weak guidance sent Kroger spiraling in its worst daily performance in six months.
Kroger's move above $29.50 in late June marked a break above its old resistance level, says Maley. That level has since acted as support for its stock.
"In the spring, it made a nice higher low and then in the summer it made a very nice higher high, and when it made that high, it broke above its trendline going back to the 2016 highs," said Maley. "This decline, especially with [Thursday's] move, has taken it right back down to that line."
How it moves next will determine how much technical damage it suffered after Thursday's sell-off, says Maley.
"If it breaks below that line in any kind of significant manner, it's going to be quite negative for the stock. If, however, it can hold the line, thus giving us another higher low, it's going to be quite positive. So it's kind of a coin flip right now," he said.
A move below around $28 would represent a break of that trendline.
Mark Tepper, CEO and president of Strategic Wealth Partners, sees fiercer competition from retail and tech giants displacing Kroger's industry leadership in the long run.
"This is definitely one of the most dominant players within the grocery space but there's way too much competition," Tepper said Thursday on "Trading Nation."
Amazon flexed its muscles in the grocery store space when it announced its acquisition of Whole Foods in June 2017. Walmart has expanded its own grocery footprint this year with increased investment in its delivery service website Jet.com.
Kroger tumbled 10 percent on Thursday to $28.58, its lowest close since late July. It remains 4 percent higher for the year.