A pullback in the market appears likely, but it would represent a buying opportunity before stocks produce more gains, the chief technical strategist at BTIG said Thursday.

On CNBC's "Squawk Box," Katie Stockton, whose calls on the market have been very right lately, said internal measures have reached worrying levels that warrant attention.

"Just in the past week or so with that run-up we saw on the , about 2.5 percent, we saw major extremes in these measures of sentiment and breadth," she contended.

The percentage of stocks above their 50-day moving averages within the S&P 500 reached 83 percent, Stockton said.

"That was the highest level since mid-2016, which did proceed a pullback," she said. "These market internal measures ... [are at] extremes that need to be relieved."

"It's going to be the FAANG stocks and the like that do ultimately drive a pullback here," she added. The term FAANG, refers to Facebook, Apple, Amazon, Netflix and Google-parent Alphabet.

In her January note to clients, Stockton wrote that she ultimately sees gains for 2018. But she warned of "deeper pullbacks" that will "keep the slope of the uptrend in check this year." She terms the gains as "more modest" than the 19.4 percent advance for the S&P 500 in 2017.

Stockton also expects the health-care sector to improve on a near-to-intermediate-term basis "primarily because of its relatively oversold condition."

"Health care has obviously underperformed in the recent months and now of course still on an absolute basis ... you're getting breakouts in these stocks," she predicted.

The Health Care Select Sector SPDR (XLV) was up nearly 1.5 percent over the past week as of Wednesday's close.