Apple shares bounced around Friday after the debut of its highly anticipated watch, but according to one technician's chart work, the stock is about to break out to new highs.
"While the watch itself doesn't have a spring I'm told, the chart of Apple is wound tight for a big move higher," said Evercore ISI's head of technical analysis, Richard Ross, on Friday's "Trading Nation. "
Ross pointed out that the tech giant has been in a well-defined uptrend for many years, but he turned his attention to a coil, or triangle, pattern that has formed over the past few months. "I think this could unlock the door to that upside," he said. "You see this big move up into the recent pattern, but then volatility is contracting within this triangle."
Apple shares are down about 5 percent from the all-time high hit in late February. "The good book of technical analysis tells us that as Apple consolidates and you see a series of lower highs and higher lows, that's the spring being wound tight and all that energy that is being stored is ultimately released higher."
The triangle pattern is important, said Ross, because it's directional and can be used as a measuring tool. "It tells us that we should get a breakout in the direction from which we came, in this case from low to high," he said. "And then we take the height of the pattern, about $17 or $18, and we tack it onto the current price. That brings Apple shares to $143."
"This a high conviction setup. I'd be a buyer of the stock into the watch release and out of it," said Ross.