×

This chart shows big gains ahead for Apple

Traders are eagerly awaiting quarterly results from the world's largest company. And if history is any guide, Apple's valuation may come to be just a few dollars shy of $1 trillion within a month.

The chart for Apple is bullish ahead of earnings, according to Carter Worth, head of technical analysis at Cornerstone Macro. That's because share prices have held what he sees as a long-term uptrend for well over a year.

Not only has the trend line held but now the stock is over $15 above it on Worth's chart. He sees that as constructive for the stock.

Apple's stock appears to have used it as a launching pad to make huge gains in a short period of time. Worth counts three times in the last year and a half when Apple made massive moves in under a month and each time was after the company reported earnings.

The average of those three moves is 27 percent in 29 days. Were Apple to make such a move now, it would bring the company's market cap to around $980 billion.

"The presumption is we're going to kick off with earnings and head to new highs," Worth said. "It's a sector unto itself. It's bigger than utilities—the entire sector. We like it long."

Read MoreOnly 22% of Apple Watches have shipped: Report

128456632AB021_AMERICANS_MO
Getty Images

Apple's fundamentals make the stock very attractive, backing up Worth's bullishness, according to options expert Mike Khouw.

"This stock is trading at less than 16 times next 12 months' earning but if you strip the cash out, it's really more like 12 times," said Khouw, a CNBC contributor. "It is not as if this company is expensive relative to the market. And even though the growth is looking to be a little bit more modest year-on-year, we're still looking at 9 percent growth. So from my perspective, it's really hard to figure out why you would be looking to sell shares at this point."

Latest Video

Tutorials

Host Bio

  • Melissa Lee

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

Options Action Traders

From Our Sponsor

Options Action Newsletter:

Sign up to receive exclusive Options Action content. Each month you'll receive an exclusive message from host Melissa Lee and insight directly from one of the members of our Options Action panel. Keep your pulse on the market with the Options Action newsletter.

Please enter a valid email address
To learn more about how we use your information, please read our Privacy Policy.