Trading Nation

A huge new rally could be in store for Apple

The bull case for Apple
UBS strategist: This looks like the end of a bull market
Q1: The quarter of reversals?

A technical analysis of Apple stock suggests that shares of the tech giant may see new all-time highs.

Shares of Apple have advanced 20 percent in the last six months, and nearly 4 percent alone this month. Ahead of its quarterly earnings announcement on Jan. 31, Rich Ross of Evercore ISI said the charts show an ultra-bullish trend.

"I think if you put aside everything you think about the company, when you break it down on just a technical basis alone, you're staring at a very bullish stock chart in the short, intermediate and long term," Ross said Wednesday on CNBC's "Trading Nation."

Examining a chart of Apple stock since 2011, in which the stock traded around the $50 level, Ross points to a "strong case for a breakout to a new all-time high" because a technical symmetry has formed between the decline in shares in 2012 and 2013 and the decline in shares between mid-2015 and mid-2016. In both declines, the stock reached down to test its 200-week moving average. And out of each decline, Ross noted, "we pushed to a new all-time high. I think we have almost the exact same setup here." The first high to which Ross referred was around $84, in mid-2014.

Over six to nine months, Ross sees the potential for upside to $135 per share, with the possibility to reach the $150 mark in the next year to 18 months. Apple share prices closed at $119.99 on Wednesday.

He added that he would be a buyer of the stock on that bullish symmetry alone.

On a shorter term chart, Ross pointed to a rounded base of support that began to form around July 2015 that he sees giving way to more upside, indicating even returning to old highs around the $135 level.

When taking value into consideration, Dennis Davitt, portfolio manager at Harvest Volatility Management, calls Apple "the greatest value stock that no one's ever heard of, but everybody owns." He pointed to Apple's 2 percent dividend and 14 times price-to-earnings ratio.

The best way to trade Apple using options, according to Davitt, is selling a $130 call, right around its all-time highs from early 2015.

Analysts give Apple an average rating of overweight, according to FactSet data, with a target price of $132.65, about 10.5 percent higher than its closing price Wednesday.