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Here's the best way to trade Apple's iPhone event

David Paul Morris | Bloomberg | Getty Images

Apple share prices will likely rally after Wednesday's expected announcement of the next iPhone and then fade after the launch if the stock follows historical patterns, according to UBS, which reiterated its buy rating on the company.

"Going into the Sep 7 event, the stock is slightly down from two weeks ago. Barring any surprises, such as an iPhone price cut, we see limited downside risk as investors already anticipate underwhelming iPhone 7 features," analyst Steven Milunovich wrote in a note to clients Tuesday.

"Expectations for the announcement Wednesday have been well set, including dual 12MP cameras for the Plus, elimination of the headphone jack and possible inclusion of wireless earbuds, a touch sensitive home button, and a new Apple Watch with GPS."

Here's how Apple has traded around the last four iPhone product announcements.