The short interest in Apple Inc. (NASDAQ: AAPL) rose by 5.3 million shares to 52.7 million for the period that ended March 15. The move came just ahead of the announcement of the new iPhone SE, a smartphone that has allowed consumers to buy the product at a lower price point.

Those investors who have sold Apple short recently may regret their decisions. The iPhone SE helped push shares higher, both during rumors about its launch and when the product finally was announced. Apple’s price has risen over 9% in the past month, but it remains down 15% over the past year.

The iPhone SE represents a huge gamble by Apple, which may affect the image of its brand and the ability to sell a much more expensive iPhone 7 when the product is released, probably in September. Apple has prided itself, and rewarded investors, as creator of the highest-priced, most-prized smartphones in the world. A new “cheap” handset may undermine that.

Two tipping points could significantly change investor sentiment in coming months. The first of these is obviously earnings, driven primarily by iPhone sales and success, or lack of it, in Greater China. The other is the launch of the of the iPhone 7, along with whatever rumors come ahead of it. If it is not a smash hit, the quarterly numbers won’t mean much. Short sellers will have a heyday.

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