Why Pete Najarian Just Bought Apple Call Options

Despite Apple Inc AAPL being up more than 20% year-to-date and not far from its all-time highs, Market Rebellion co-founder Pete Najarian expects more upside for the stock into year's end.

"It looks like a name that wants to break out to the upside," Najarian said Tuesday on CNBC's "Fast Money Halftime Report."

Najarian noted that volatility is picking up and options volume is increasing. He expects this trend to persist through the end of the year.

Stocks that have stretched multiples and have rallied on growth prospects are under pressure, he said.

"A lot of those names aren't quite living up to what they had already gotten themselves to in terms of some of those valuations."

See Also: BZ Chart Of The Day: Is Apple Rolling Over?

Najarian thinks the money will continue to come out of names that are "way too far in front of themselves" and investors will turn to fundamental-story stocks like Apple and Microsoft Corp MSFT.

Najarian already owned Apple shares, but he recently added call options.

"I think we will continue to see the fundamental story be right for a lot of these big tech names," Najarian said.

AAPL Price Action: Apple has traded as high as $165.70 and as low as $112.59 over a 52-week period.

The stock was down 0.64% at $159.99 at time of publication.