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This chart shows why Apple could go a lot higher

This has been a banner week for Apple.

Shares of the tech juggernaut finally traded above $600 for the first time since October 2012. In fact, in the last couple of weeks, Apple's stock is up 13 percent.

But, while the company's stock is cheap compared with the overall market, it could face obstacles. Nonetheless, the technicals may be pointing the stock ever closer toward its all-time highs.

Gina Sanchez, founder of Chantico Global, says Apple's latest gains have more to do with its relative valuation rather than anything else.

"The story behind Apple is a valuation story," said Sanchez, a CNBC contributor. "It is cheap relative to the industry and so maybe it could have a little more to run."

Apple trades at 13.5 times this year's estimated earnings while the tech-heavy Nasdaq composite index trades at 23.9 times its earnings. The company is even cheap relative to the benchmark S&P 500 index, which trades at 16.7 times earnings.

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Yet Sanchez says that the long-term fundamentals for Apple aren't good. Her worry is the company's iPhone business, which accounted for 53 percent of its revenue in 2013.

"It's about 318 million total iPhone users in the world," Sanchez said. "Replacement demand alone is not going to be able to keep that growth going. So, the iPhone 6 will have to take increasing market share in order to keep the story for Apple positive. And, that's a challenge."

While Sanchez sees some upside ahead for Apple's shares, she warns investors that its fundamentals could be an issue down the road.

"While I do think that there is some room to run on a valuation basis because it is a cheap stock," said Sanchez, "I think that the fundamental story shows some slowing."

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Steven Pytlar, chief equity strategist at Prime Executions, is quite positive on Apple's prospects over the next few months.

"The charts look pretty good," said Pytlar. "They tell us that we probably should expect some upside in the near term."

Pytlar sees a "cup and handle" pattern in Apple's 18-month chart. He sees a large base of support for much of 2013 followed by a second, smaller base in 2014 which rounded out at a higher level. Cup and handle formations are considered bullish because stocks are expected to break out above the formation's resistance level. In the case of Apple, Pytlar sees resistance as having been broken around the $575 level.

"It means that investor interest is returning after that long basing process," he said. "This is usually very constructive. Technically, it could project probably to the mid-$600s by the end of the year."

To see the full discussion on Apple, with Sanchez on the fundamentals and Pytlar on the technicals, watch the video above.

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