Apple shares are sitting in correction territory, down 10 percent from their March highs, but one technician says the tech giant is ripe for a breakout when it reports earnings after the bell on Tuesday.
"Obviously things move on earnings, I'm going to bet that [Apple's move] is going to be to the upside," Carter Worth of Cornerstone Macro said Monday on CNBC's "Fast Money."
Apple has been underperforming the broader market and the S&P technology sector in 2018. Shares of the tech giant are down 2.4 percent, while the S&P 500 is down 1 percent and the tech sector is up more than 3 percent this year.
Worth noted that Apple's underperformance is a rather rare occurrence. For only eight of the past 36 years, Apple stock was down while the tech sector was up in the January to April period, Worth said.
Even more importantly is how Apple stock performed following those periods of underperformance, said Worth. In the week following, the stock rose nearly 4 percent; in the two weeks following, the stock jumped 8 percent; in the three weeks following, it surged 11 percent. Furthermore, the odds that the stock rises ranges from 57 percent to 85 percent.
"I'm going to make the bet that Monday's action alone [in Apple] was very bullish in the context of a bad tape is a tell that Apple might just be defensive," Worth said.
Moreover, "Apple has made no progress. It's dead even with the market for three years. So we can't consider it a runaway stock or expensive," Worth added. "I'm going to make the bet that we bounce in response to earnings."
Analysts polled by FactSet are expecting Apple to report earnings of $2.69 per share on $61 billion in revenue.