He continued: “Zabitsky’s target of $270 was dead on, just early on the draw.”

That’s a reference the advice of ACI Research’s Ed Zabitsky, who set a price target of $270 a share last January and famously advised his institutional clients to sell Apple (AAPL) short just as the stock was beginning an eight-month, 68% run from $420 to $705.

I’ve been getting a lot of e-mails like that lately, and seeing similar sentiments — although not  always that extreme — expressed on CNBC, Seeking Alpha and even mainstream business publications such as, ahem, Forbes.

A lot of investors are wondering how low Apple can go in the wake of the sell-off that took its share price from over $705 in September to less than $523 in Thursday’s trading — a 26% drop. [UPDATE: It fell below $506 in late-morning trading Friday.]

Apple has had worse sell-offs in the past. In 2002 it fell 41% in the space of four months. During the 2008 fiscal crisis it fell 45% in just six weeks.

But there are limits to how far Apple can go today. For one thing, it’s sitting on more than $121 billion in cash and marketable securities, or nearly $130 per share, with zero debt. It’s also paying, at today’s stock price, a 2% dividend. And by its own conservative estimates, it expects to sell more than $52 billion worth of iPhones, iPads, iPods and Macs this quarter.

In a note to clients Thursday, Morgan Stanley’s Katy Huberty laid out her bull, base and bear cases for the stock. We reported on the first two cases yesterday. Here’s her bear case:

“Apple begins to cede market share to Windows 8 in mature markets and lower-priced solutions in emerging markets. Single-digit revenue growth and lack of continued gross margin expansion limits EPS growth. P/E multiple is depressed at 11x due to growth and competitive concerns. Price target: $495.”