Ever since reporting earnings in April, Apple (AAPL 0.64%) has been on a mean rally. After bottoming out at $385 shortly before the release, shares have promptly rallied over $75 in just over two weeks.

Investors seem to be gradually building appreciation for the massive $100-billion capital return program, because shares didn't immediately react much to the announcement. However, there's one strange reason why the rally may not make much sense.

Feel the squeeze
During the second half of April, short interest skyrocketed. By mid-month, there were just over 20-million shares being held short by bears. That figure more than doubled to 41.6 million by month's end. Usually, a big jump in short interest would be associated with a stock's decline, not the other way around.

Source: Nasdaq.

Goldman Sachs analyst Bill Shope also noticed the jump, and was boggled. Investors may be fretting that they've missed out on the gains by now, based on Shope's conversations with shareholders. The analyst also thinks there was something of a "delayed reaction" to the capital return program. Shope thought that many of Apple's negative near-term catalysts had been removed, which is why he was "surprised" to see short interest rise precipitously.

However, there's one way to explain this apparent discrepancy. It's worth clarifying that short interest figures are reported based on settlement date, not trade date. That means that the April 30 figures correspond to a trade date of April 25. That was two days after Apple's fiscal second quarter report, and largely before the rally really began. The bears were still feeling bearish in wake of the results.

Likewise, the April 15 short interest metric corresponds to an April 10 trade date. Between the two trade dates associated with those settlement dates, Apple did decline by over 6%, which better explains the higher short interest.

Since April 25, shares had gained as much as 14% to this week's high. As investors come to appreciate the repurchase program and start buying in, there's a distinct possibility that some of the recent gains will be attributed to shorts only now starting to bail, triggering a short squeeze.

Chances are there are still a lot of shorts who have yet to buy back those borrowed shares, and more upside could be in store.