Man who called Apple’s fall now sees this

There's been no Santa Claus rally for shares of Apple this year, with the stock in bear market territory since hitting its highs in April. And according to one trader who relies heavily on the charts, it's about to get worse.

"We see this big head-and-shoulders top that's formed over the stock here," said Richard Ross on Tuesday's "Trading Nation." "The stock is sitting right on the neckline of the entire pattern, that comes in just around $106."

According to Ross' chart work, Apple shares are sitting at a very precarious level, resting just above the neckline of a head-and- shoulders pattern. By his work, a break below $106 could unleash a torrent of selling that could see Apple shares fall to $75, which would put it well below its 52-week low of $92 reach during the flash crash.

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"Any break below that level, you're a seller of the stock," said Ross, Evercore ISI head technician.

Ross has had a history of accurately forecasting Apple's moves. He initially turned bearish in October, when the stock violated a key moving average following its earnings. The stock is down about 7 percent since that report.

Apple has failed to get investors excited in 2015 despite the launch of a number of new products, including the Apple Watch, a much larger iPad Pro and upgrades to the newer iPhone 6s and 6s Plus.

"Even if we hold here and get some sort of a bounce, I would be a seller of the stock on a bounce here given the gravity of this entire top that's formed over this stock," said Ross.

Correction: An earlier version misstated the day Ross appeared on "Trading Nation."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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