A group of "classic" Dow stocks is surging this year, but a top technician warns that the rally in one name in particular is about to stall.
While everyone has been focused on the FANG group, a number of classic Dow stocks have been on a stealth rally. Boeing and McDonald's are leading the pack, both surging nearly 30 percent this year and hitting all-time highs again Monday. 3M and Johnson & Johnson are each up almost 20 percent in 2017 with United Technologies following behind — rallying 11 percent.
However, as industrial stocks Boeing, 3M and United Technologies have been trading at record highs, the sector as a whole continues to underperform the broader market, according to Carter Worth of Cornerstone Macro.
The S&P 500 Industrial ETF, XLI, has "broken out to all-time highs, but its relative performance got right back to its prior high and has been stuck there three times. I think it's going to remain stuck," Worth said Friday on CNBC's "Options Action."
Among those industrial stocks that have broken out, "you've got 3M that has just taken off," he said. "What you know is it has busted out, and the angle is so steep. Often times when you do that, you will actually fall back from the point in which you broke out."
In the case with 3M, "that would be about an 8 percent correction down to the $195 level," Worth said. "What I'm thinking at this point is 3M has gone a little too far … If you're long 3M, I would take profits, do something. If you're a short seller, I'd go after this one."
3M shares were trading in the $213.09 range midafternoon Monday.
