Bears Start to Circle Apple Stock

Rosenblatt Securities downgraded Apple Inc. (NASDAQ:AAPL) to "sell" from "neutral," saying "there is less reward for owning Apple stock," following its recent buyback-related boost. And while it doesn't think the equity is "a short," it does see "fundamental deterioration" in the iPhone maker over the next year. The brokerage firm maintained its $150 AAPL price target, a 26% discount to last Friday's close at $204.23.

This marks a rare bear note for the tech titan. Prior to today, 14 analysts maintained a "buy" or better rating on Apple, compared to 13 "holds," and not a single "sell." Plus, the average 12-month price target of $212.03 sits in territory not charted since early May.

Skepticism toward AAPL is growing in other corners of the Street, too, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.78 ranks in the 92nd annual percentile. So while calls have outnumbered puts on an absolute basis, the rate of put buying relative to call buying has been accelerated.

Drilling down, the July 185 put is home to peak front-month open interest on Apple stock, with nearly 58,000 contracts outstanding. Data from the major options exchanges confirms significant buy-to-open activity here, indicating options traders are bracing for a swift move below $185.

Apple shares were trading south of here as recently as early June, just as they were starting to recover from their June 3 intraday low of $170.27. Since hitting this short-term bottom, AAPL is up 20% -- brushing off recent headwinds related to Sir Jony Ive's exit. The equity looks set to pare some of these gains today, though, down 1.6% ahead of the bell.