And its shares are far more attractive at $350 than its bumbling rival’s are at $10, writes Michael Shulman of Short-Side Trader.  

Apple (Nasdaq: AAPL) and Nokia (NYSE: NOK) are a classic "paired trade." Pairing a trade means identifying a winner and loser from the same event or trend in the real-world marketplace, and translating that into a long and short position.

Apple has redefined the cell phone and smartphone as a handheld computer, with ever-increasing functionality at lower and lower price points.

Nokia has completely missed this market. It tried to enter the market in the US and was whacked when AT&T (NYSE: T) changed its mind about selling the new Nokia smartphone. That left Nokia battling it out against low-cost producers, and the best producers, at low- and mid-range price points. It's a battle Nokia won't win. We might work this trade all year.

Last week, Apple bounced off the technical ceiling of $350, hurting our April 350 calls. But we have plenty of time for this position to recover. The Buy Under price remains at $12.50. [The calls closed at $15 Wednesday—Editor.]

I've also recommended buying the Nokia April 10 Puts under 65 cents, and the position has moved a bit away from us. [The puts closed at 25 cents Wednesday—Editor.] There are several catalysts in the coming days, including earnings, and if the stock can punch through support at around $10, there are great profits to be made.

[Wait to buy Nokia shares at $8.50, Jim Jubak argued last month, after discussing Apple’s competitive threat. To see why Apple and the other large-cap techs are so popular these days, follow the money, writes Igor Greenwald—Editor.]

Subscribe to Short-Side Trader here…