Why Apple May Decline On Earnings

On CNBC's "Options Action," Carter Worth said it was a big week for Apple Inc (NASDAQ: AAPL). While Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOGL) and Microsoft Corp (NASDAQ: MSFT) were down on the week, Apple’s stock rose about 2.7%.

Apple has outperformed the Invesco QQQ Trust Series 1 (NASDAQ: QQQ) for most of the year. Although Apple’s chart is not “exceedingly bullish,” the very strong week suggests something untoward is coming next week.

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While it's hard to bet against the iPhone maker going into earnings, looking at the price action over the past few days shows the stock was rejected at the $150 level, Tony Zhang said. He added, however, that Apple has underperformed the market and its industry since its July high.

Volumes have declined since July, which indicates the stock may not be able to break the $150 level, Zhang mentioned.