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Gundlach: 'Apple Really Oversold'

Stocks in this article: AAPL

NEW YORK ( TheStreet) -- Bond guru Jeffrey Gundlach made a prescient call on Apple (AAPL) earlier this year, saying it would go lower, and eventually hit $425 per share. Now, he has no opinion on the technology giant, but did note shares were oversold at these levels.

Speaking during his "Big Easy" presentation about central bank balance sheets and quantitative easing, Doubleline Capital's Gundlach touched on the tech giant, and where its stock is headed. "I don't have an opinion on Apple now," Gundlach said. He noted that Apple is "really oversold" in the short-term, and could go higher as its next move, but does not think Apple shares will see $700 "anytime soon."

The bond manager first mentioned that he was short Apple as part of a pair trade in April 2012, at the Ira Sohn investment conference in New York City. He was long natural gas as the other part of the trade.

Apple shares moved past $700 in mid-Setepmber, right after the company announced the iPhone 5. Since then, the stock has fallen 38.4%, compared to a 1.4% gain in the Nasdaq.

In January of this year, Gundlach said he thought Apple would retrace to $425, the level the iPhone maker was at before it started its parabolic run to just over $700. "I deeply believe Apple is headed to $425 a share," Gundlach said during a CNBC interview. "Not because I'm a bond guy or stock guy, but because I'm a market guy. I've been around for a long time and I know that when something goes vertical like Apple did from $425, once the bubble pops it goes back down to the point at which it lifted off."

AAPL Chart AAPL data by YCharts

Earlier this week, Apple shares reached Gundlach's $425 target, as perceptions about product innovation and slowing revenue growth have hit the stock.

Apple is reportedly trying to counteract those perceptions with the launch of an iWatch later this year, which could provide additional revenue for the tech giant. Apple is also likely to update its iPhone and iPad lineups later this year, with the iPhone 5S reportedly slated for August.

-- Written by Chris Ciaccia in New York

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