Charts are showing a big buying opportunity for UPS: Technician

UPS has been one of the biggest laggards in the industrials sector this year, but one technician says the charts are pointing to a big breakout on earnings this week.

The transportation stock has been a strong market performer since its IPO in 1999; however, UPS has significantly lagged the broader market since its low in March 2009. While the S&P 500 has gone up 275 percent, UPS has only gained 205 percent, which presents an attractive buying opportunity ahead of earnings, according to Carter Worth of Cornerstone Macro.

"This is the opportunity. UPS has lagged. It's a big name, and we know what's going on, and I think it's a name to play," Worth said Friday on CNBC's "Options Action."

Looking at a chart of UPS, Worth explained that the stock looks poised to break above the prior high made in December 2016.

"I think you're going to get a breakout, and I'm going to make the bet that UPS will make a high. I want to be long into earnings."

However, Brian Kelly of BK Capital Management said, "There are other issues out there. In the past couple of years, they have had those operational issues. I'd rather take a shot on the short side here."

UPS reports before the bell on Thursday, and analysts polled by FactSet are expecting earnings of $1.45 per share on $15.6 billion in revenue.

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