Apple is closing in on record highs and if several charts are to be believed, the world's most valuable company may soon surge to new highs.
For the last three months, Apple has traded in a tight range between $121.63 and $134.54. But in an otherwise quiet tape, Apple stealthily gained 2 percent last week. And according to top-ranked technical analyst Carter Worth, Apple's charts are pointing to a bullish breakout. "It has been very tight and range-bound," he said. "We think it's going to get out of the range and move up."
Looking at a long-term chart of Apple, Worth sees the stock following an uptrend that has been in place for a couple of years. "We've bounced off the line over and over and over," he said. "The presumption is we're about to bounce once again."
Apple's shorter-term chart gives Worth an even more optimistic outlook on the stock. He sees shares as now testing the upper bound of this year's major range while simultaneously being supported by a steeper shorter-term uptrend.
"We are buyers here," concluded Worth. "It should be a good 5 to 6 percent move."
A 6 percent move in Apple's stock from Friday's close would push the stock above $140 and would add $45.8 billion to the company's current market cap $763.6 billion, which is more than the 10 bottom stocks in the S&P 500 combined, according to data compiled by FactSet.
It's not just technicians who are bullish on Apple. Options traders have plowed into the name. Call buying on Friday was above average, which is noteworthy given that it was the Friday before Memorial Day, typically a slow time in the options pits. Additionally, Apple's volatility index, which is essentially a gauge of fear in Apple's stock, has had a precipitous fall over the past several weeks. It has now broken below a support line in place for well over a year, according to Brian Stutland, founder of Equity Armor Investments.
"That has translated into that bullish up move in the stock," said Stutland. "That's very bullish sentiment for any sort of asset class, and that could continue to push Apple higher."
