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Why Apple could make a run to $200

Key Points
  • Apple could see further upside from current levels, Evercore ISI technician Rich Ross said in a recent interview.
  • A technical analysis of shorter-term and longer-term charts give Ross confidence in bullish view.
  • Apple shares have already advanced 34 percent year to date.
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The technical case for an Apple rally

After rising 34 percent year to date, shares of Apple could easily advance another 16 percent, according to top technician Rich Ross.

A combination of the five-year weekly chart of Apple shares, along with an examination of a yearlong daily chart (what Ross called "a picture of strength") gives Evercore ISI's head of technical analysis confidence in calling for the $155-a-share tech behemoth to climb to the $180 mark.

"Of course, we're not going to go there in a straight line. But Apple is not necessarily the quintessential trading stock. It's the type of stock where you buy it and hold it. And I don't say that lightly. But the setup is there to buy it and hold it, and if it pulled back I would buy more," he said Tuesday on CNBC's "Trading Nation. "

Ross added, "The stock goes to $180 and I have strong conviction on that move."

On a longer-term weekly chart, Ross pointed to a rounded multiyear base of support after a decline that tested its 200-week moving average. Such a large "bullish base breakout" points to his projected $180 target.

In the shorter-term daily chart, Ross noted the stock "hasn't even touched its 50-day moving average since December; that's quite strong."

On Monday, Apple's Worldwide Developers Conference yielded announcements like a new operating system for the Mac and new virtual reality offerings. The iOS 11 will launch in September, the company said. The next major development will likely be the iPhone 8 announcement later this year.

Shares of Apple indeed appear poised to keep running, Miller Tabak equity strategist Matt Maley said. But he said several factors give him reason to believe the stock may "top out sometime soon."

In referring to a "top," Maley is describing the highest price a stock reaches before its upward trend reverses downward, at least in a temporary manner. The shares are overbought on a near-term basis, Maley said, referring to the stock's relative strength index. That index measures an asset's price movement by comparing the magnitude of its gains and losses over a given period of time.

On a more granular level, Maley pointed out, the stock is now trading more than 22 percent above its 200-day moving average.

The last two times Apple has been in that range above its 200-day moving average, "the stock has rolled over," Maley said.

"And in one case, it rolled over quite severely. Having said that, if we went back three times, it got to a 44 percent premium before it rolled over. So I might be grasping at straws a little bit, but I think it's always important to talk about both sides of the story, because this one does look quite good," he said.

Shares of Apple were higher in midday trading Wednesday.