Traders Have Noticed That The Buy-Apple, Sell-BlackBerry Trade Has Flipped

Sometimes the world turns on its head. This chart showing Blackberry's stock performance relative to Apple's is one example of that.

Blackberry shares have almost doubled out of their December lows climbing from $5.75 to today's close of $9.14. The Street's noticed, and hedge fund managers like Dan Loeb of Third Point have revealed stakes in the company.
Meanwhile, money is flowing out of Apple, which is down 6% since the beginning of the year.
Hedge fund manager J.C. Parets of Eagle Bay Capital thinks that Blackberry still has room to double, and he sent us this chart showing Blackberry relative to Apple.

Blackberry Apple ratio Chart

Eagle Bay Capital

"Sentiment is a beautiful thing," said Parets. "If everyone thinks something is going lower (in this case BBRY), there comes a point where anyone with that belief has already acted upon that belief (and sold). Eventually there just aren't any sellers left, and if all we have are buyers - epic squeeze. We saw it in BBRY and we saw it in S&P500 in early 2009. The best part about these extreme sentiment unwinds is that the ensuing rallies last longer and go further than your standard uptrend."

He continued: "In AAPL we're seeing the opposite. All of the great news was priced into the stock by the end of 2012."

This could be the beginning of a big reversal from 2013. According to a recent report from Goldman Sachs, Blackberry was one of the of the 50 stocks with over $1 billion market cap that hedge funds liked to short the most. Conversely, Apple made Goldman's "hedge fund VIP" list. According to Factset, the 50 largest hedge funds increased their Apple exposure by 3.6% in Q4 2013. However, the research firm also points out that since Carl Icahn has backed off his effort to force Apple to buyback stock, hedge funds may be backing off the stock as well.

So things can change, and this chart shows that the tide may be turning.

What a difference a year and change makes.