A major May sell-off has set off bearish alarms on the Dow.
Caterpillar entered a death cross on Friday after its 50-day moving average crossed below its 200-day, a technical sign that points to a downward trend. Exxon Mobil, Johnson & Johnson, and Boeing look to be headed in the same direction -- their 50-day moving averages are within 1% of their 200-day.
Craig Johnson, chief market technician at Piper Jaffray, says it doesn't look pretty.
"Sixteen of the 30 names in the Dow are now in some sort of bearish technical setup at this point in time. If you do the math on the S&P 500, you've got about 15% of the S&P 500 now below its December lows," Johnson said Friday on CNBC's "Trading Nation."
A handful of Dow stocks could also be in for more pain over the summer, he warns.
"Look at an Exxon Mobil, you've been making lower lows and lower highs for quite some time. Johnson & Johnson could be a head-and-shoulders top or a double top and, specifically, if we pull up the chart and look at Boeing, Boeing is a stock that tried to break out. It's now making a series of lower lows and lower highs. It doesn't look like it's come in for a landing back to support," he said.
Johnson says Boeing may not find support until it returns to December lows at roughly $292.47. The stock would need to fall 14% to return to those levels.
Two Dow stocks do look like a buy after May's sell-off, though, says Quint Tatro, founder and president at Joule Financial.
"We're trying to stay away from companies that have this direct exposure to obviously what is impacting the market here," Tatro said during the same segment. "The two that we favor right now are Walmart and Disney, navigating well in this very uncertain environment."
Walmart and Disney fell 1% and 4% in May, respectively, a narrower loss than the nearly 7% drop of the Dow.
However, they are "not tremendously undervalued — 20 times forward earnings on both cases, but again decent dividends, excellent balance sheets, technically sound and have come in here and excellent plays," said Tatro. "Stay in the things that are working in this environment."
Both remain positive for the quarter with Disney on track for its best performance since December 2011.
Disclosure: Tatro and Joule Financial have positions in WMT and DIS.
