NEW YORK (TheStreet) - Two of the most popular momentum stocks are the world's largest company Apple (AAPL), and the 2015 momentum leader Netflix (NFLX).

Apple announced its 7-for-1 stock split on April 23, 2014 and started to trade split-adjusted on June 9, 2014. Netflix announced their stock split on Tuesday, June 23 and will begin to trade split-adjusted on July 15.

A major difference between Netflix and Apple is that Netflix has been a strong stock getting stronger, while Apple was sliding going into April 23, 2014. Let's take a look at the daily and weekly charts for both stocks and show the key levels as a guide to current trading strategies.

Here's the daily chart for Apple.


Courtesy of MetaStock Xenith

Apple closed at $127.03 on Tuesday, up 15.1% year to date, but down 5.6% from its all-time intraday high of $134.54 set on April 28. The stock closed just below its 50-day simple moving average of $128.37 and well above its 200-day simple moving average of $117.36.

Apple announced its 7-for-1 stock split back on April 23, 2014 along with a huge earnings beat. The stock had a split-adjusted close of $74.96 on April 23, just below its 50-day simple moving average then at $75.90. On April 24, the stock had a price gap higher with an open of $81.17, up 8.3% and began a new momentum run-up.

The stock split took effect on June 9, 2014 with an open of $92.70 up 23.7% from the pre-announcement close of $74.96 on April 23. Since then, shares of Apple are up 37%.

Here's the weekly chart for Apple.


Courtesy of MetaStock Xenith

The weekly chart for Apple has been negative since June 12 and will stay negative if the stock ends the week on Friday below its key weekly moving average of $127.75. The weekly momentum reading is projected to fall to 47.45 this week from 54.22 on June 19.

Investors looking to buy Apple should place a good till canceled limit order to purchase the stock if it drops to $110.43, which is a key level on technical charts until the end of 2015.

Here's the daily chart for Netflix.


Courtesy of MetaStock Xenith

Netflix had a close of $681.19 on Tuesday, up a mammoth 99.4% year to date, with the stock significantly above its 50-day and 200-day simple moving averages of $602.48 and $456.89, respectively. The stock gapped higher with an open of $700.10 on Wednesday.

The charts show Netflix has been a strong stock getting stronger, while Apple was sliding going into April 23, 2014. Note the many price gaps on this chart which could be filled on weakness following the first split-adjusted trading day on July 15.

Here's the weekly chart for Netflix.


Courtesy of MetaStock Xenith

The weekly chart for Netflix has been positive since the week of April 10, 2015 when the stock had a close of $454.57. Today the stock is well above its key weekly moving average of $622.12 with extremely overbought momentum. The weekly momentum reading is projected to rise to 92.88, well above the overbought threshold of 80.00.

Netflix traded as high as $702.85 pre-market on Wednesday. The pre-split high for Apple was $705.04 set on Sept. 21, 2012. The post-split low for Apple was $55.01 set on April 19, 2013.

Investors looking to buy Netflix should place a good till canceled limit order to purchase the stock if it drops to $685.86, which is a key level on technical charts until the end of this week.

Investors not familiar with technical analysis should begin with the notion that a price chart for a stock shows a road map of past price performance, which provides guidance for predicting future share price direction.

Here's how to read a daily chart. There are two moving averages to follow; the 50-day simple moving average is in blue while the 200-day simple moving average is in green.

Here's how to read a weekly chart. This chart shows weekly price bars going back to the beginning of 2007 and thus includes the Crash of 2008, then the current bull market for stocks that began in March 2009. The red line tracks the ups and downs of the key weekly moving average. The green line is the 200-week simple moving average. The red line that oscillates along the bottom of the chart is the momentum reading on a scale of 00.00 to 100.00. A reading below 20.00 is oversold and a reading above 80.00 is overbought.

A technically positive weekly chart occurs when a stock ends a week above its key weekly moving average with the momentum reading rising above 20.00.

A technically negative weekly chart occurs when a stock ends a week below its key weekly moving average with the momentum reading declining below 80.00.

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

More from Opinion

Tuesday Turnaround: Micron, Autonomous Driving, and J.C. Penney

Tuesday Turnaround: Micron, Autonomous Driving, and J.C. Penney

Cable Stock Investors Should Keep an Eye On Wireless Broadband's Rise

Cable Stock Investors Should Keep an Eye On Wireless Broadband's Rise

Trump Blinks on China Trade War That's Looking Harder to Win

Trump Blinks on China Trade War That's Looking Harder to Win

Monday Madness: GE, China, and Micron

Monday Madness: GE, China, and Micron

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly