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The remarkable similarity between Apple and biotech

For one top technician, there are only two names that matter to the market right now: Apple and biotech.

"The correlation between Apple and biotech is outstanding," technical analyst Carter Worth said Friday on CNBC's "Options Action." In what he's dubbing the "king and queen" of the market, Worth said, "The way the two act, you'd think nothing else in the market mattered."

Shares of Apple and the Nasdaq Biotech ETF, the IBB, have rallied in tandem this year, up 18 and 20 percent, respectively, while the broader S&P 500 index is up just 2.5 percent in the same period.

"In the context of a U.S. equity market that literally is stuck in its tracks—and has been stuck for months. And despite [Apple and biotech] being up considerably more than the market year to date, both, by our work, are headed higher still," added Worth, head of technical analysis at Cornerstone Macro.

By Worth's chart work, Apple and the IBB are tracking as though they are "married." Taking a look at some comparative charts, he pointed out that the correlation has been steady for some time.

"It's not just year to date. If you look at over the past 12 months the chart is virtually identical," he said. Biotech is up 51 percent and Apple has risen 44 percent in the past year. Worth added that the relationship holds true for the past two years as well.

"Relative strength is an important thing and money favors these assets," said Worth. "And if you look at a day-to-day picture, it really isn't as ahead of itself as one would think."

Worth said he believes Apple prices could rally another 9 percent to $142 per share and biotech could rise 10 percent to $400. Both would mean all-time highs for both.

"Be short the market and long King Apple and Queen Biotech," added Worth.

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  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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