My gut tells me they are going to run AAPL up again to sustain a rally in the markets. It was the one stock that fueled the markets for years, now that it pulled back by 40% from it's highs while the indexes make all time highs, I think it gets jacked up hard again to take the indexes even higher. Everything else in the NASDAQ and S&P could stay flat from here, as long as they move AAPL up the indexes will move up.
You can buy AAPL calls cheap, months out from here. Well worth the risk if you believe that AAPL will bounce back at least $100 from here. All it takes is one big piece of news out of AAPL and it will jump 10% or more in a single day. A run back to $560 in the short term is reasonable, if shorts get squeezed it could get there in 3 trading days. Shorting AAPL here is suicide, the easy money was made. I see little to no downside with 30% upside. Does anyone see a better large cap stock trading at these multiples in this market? I don't. If you think AAPL deserves a 15 multiple, that would put AAPL at $650+ if you back out the cash.
My thinking is that AAPL will rise in to earning as no one will want to risk being short then. Premiums also rise going in to earnings. If you out to May as a minimum, you can make a fortune. I'm not looking at the next few days or 3 weeks but it could be closer to $500 before earnings, by then options would be way to expensive. I just have this gut feeling that AAPL is going to spike $50 one day and that will be it for short sellers. This market needs AAPL in order to move higher and sustain these gains. AAPL is the one vehicle that can keep these markets moving. Once the squeeze is on, it is going to run up quickly. Everyone is so negative which tells me it is time to to get constructive on AAPL.
What your saying sounds reasonable, but if the market goes into a correction, AAPL, being a serious under-performer would get dumped. Under-performers always get dumped in a correction. You need to find out why AAPL is down first before you apply your strategy. Their number are starting to slip. Find out why and if they can do anything to get back on the track that moved the stock to 700.