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It’s time to bet against Apple, says technical trader

As the tech sector continues to struggle, TradingAnalysis.com founder Todd Gordon says it's time to bet against the biggest tech giant of them all.

By comparing a 60-minute candlestick chart of Apple against the Nasdaq 100-tracking ETF QQQ, Gordon points out that not only is Apple underperforming the QQQ while many tech stocks have rebounded, but a certain pattern suggests the stock will have trouble moving higher.

"We've fallen into quite a consolidation here right around the mid-$140 area," he said Thursday on CNBC's "Trading Nation." "Apple has been unable to recapture [its] June 9 high."

Since Apple is hovering in the mid-$140s, Gordon is betting that the stock can stay below $145. As a result, he is putting down a "call credit spread," which entails selling the July monthly 145-strike calls and buying the July monthly 150-strike calls expiring July 21. His credit for putting on the trade is about $1.60, which is $160 per options spread and is the maximum reward Gordon can receive if Apple closes below 145 on July 21.

If Apple closes above $146.60 on July 21 expiration, this trade will deliver a loss. And the maximum loss will come if it rises above $145.

Despite dropping more than 6 percent this month, Apple is still up 24 percent this year.

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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.

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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