Apple recovered $38.05 per share yesterday, rising from $527.68 on Friday to close at $565.73 at close of play yesterday.

It seems likely that investors reacted positively to a number of factors. As we reported yesterday, the mass sell off of Apple's stock seems likely to have been driven by the looming fiscal cliff, specifically the expiration in January of tax cuts. Apple's investors appear to have been cashing in their gains now so that they won't be hit by next year's increased taxes - currently capital gains tax is 15% but this could rise to 35% in January.

Fear of the fiscal cliff certainly seems to be a credible reason for the sell off given that President Barack Obama, Treasury Secretary Tim Geithner, and House Speaker John Boehner made calming statements regarding the fiscal cliff over the weekend and investors reacted positively on Monday, notes Forbes.

The so-called fiscal cliff is a set of law changes set to take effect in the US on 31 December 2012. They will include new taxes related to Obama's health care law as well as aim to cut the federal budget deficit. However, it is feared that they may drag the US economy back into recession.

Even more evidence that these fears are what lead to the mass reduction in Apple's share price: Obama actually called and spoke to Apple CEO Tim Cook about the fiscal cliff.

A White House official told CNN that the discussion was part of the president's "outreach on the need to find a balanced deficit-reduction solution that protects the middle class and continues to move our economy forward." Along with Cook, Obama contacted Jamie Dimon of JPMorgan Chase, Jim McNerney of Boeing, and Craig Jelinek of Costco.

Those investors that aren't afraid of the fiscal cliff, may have been spurred on by bullish comments from analysts who have overwhelmingly been describing that Apple as a Buy.

In a note to investors from Topeka Capital Markets analyst Brian White described the Apple sell off as "insanely insane", reports MacRumors.

White noted a number of reasons why Apple is an attractive stock: "The depressed valuation (CY13 P/E of 7.6x ex-cash), new blockbuster products for the holiday season, the attractive long-term growth opportunities that lie ahead and the Company's ability to distribute significant cash flow to investors." He also noted that the quarter we are in now has "Historically been the strongest quarter of the year for the stock." Topeka has a $1,111 12-month price target for AAPL stock, that's almost double where it is now.

White isn't the only person noting Apple's P/E ratio. A Forbes article notes that Apple's P/E of 9 "Makes Apple the cheapest stock on the market today" If the market was efficient Apple would be at $1,000 per share."

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