Buy Apple—the bulls will win this ‘war’: Trader

After three tough months for Apple, the tech giant is finally finding a bottom, according to one trader.

Apple shares are down more than 20 percent since November due to concerns about slowing iPhone sales and a difficult economic environment in China. But that selling makes this the ideal time to make a bullish play on the stock, according to Andrew Keene of AlphaShark.

Keene believes that new products will give Apple a much-needed boost. Keene also noted that the company is still holding plenty of cash.

"In the short term, we might get some volatility, ... [but] it is starting to consolidate here," Keene said Thursday on CNBC's "Trading Nation." "This is a tug of war between the bulls and the bears to see who wins."

And Keene says the bulls now have the edge.

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"By 2017, I think Apple can march its way back to up to the highs, just like Facebook did, up to that $115 level," he said.

To make a bullish trade, Keene is buying the January 2017 105-strike call and selling the January 115-strike call for a total cost of $2.50 per share, which is an options strategy known as a "bull call spread." Keene sees maximum profits if Apple rises to $115 by January expiration, but the trade is profitable if Apple shares rise to $107.50 by that time. Below that level, his losses are capped at the amount spent on the trade.

A jump to $107.50 would be a 12 percent move for Apple's stock, which traded around $96 on Friday morning.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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