Shares of Apple (AAPL) traded both higher and lower in after-hours trading on Tuesday after its earnings report was released. The shares opened higher on Wednesday, rising almost 2.5% to around $117.40 by midday.

The muted reaction to positive earnings provides a trading opportunity for investors looking at daily and weekly charts. If you compare the weekly chart for Apple to the weekly chart for the S&P 500 , you'll see the axiom that "How Apple trades, so trades the market" is not always the case.

Apple expects robust holiday sales for the iPhone with growth well above the levels of 2014. On Wednesday. Apple was upgraded to overweight at Pacific Crest with a $142 price target.

Let's look at the technicals. Here's the daily chart for Apple.


Courtesy of MetaStock Xenith

Apple traded between $113.88 and $118.32 in after-hours trading on Tuesday and opened on Wednesday at $116.93. The stock is between its 50-day simple moving average of $112.18 and the 200-day simple moving average of $121.57.

The horizontal lines are the Fibonacci Retracements of the decline from the all-time high of $134.54, set on April 28, to the flash crash low of $92.00, set on Aug. 24, "Black Monday." Shares of Apple stabilized after the crash around its 38.2% retracement of $108.24, before picking up momentum going into October.

The overnight trading range and Wednesday's price action have the stock between its 50% retracement of $113.27 and its 61.8% retracement of $118.31, which was tested after the close on Tuesday.

Here's the weekly chart for Apple.


Courtesy of MetaStock Xenith

The weekly chart for Apple stays positive if the stock closes on Friday, Oct. 30 above its key weekly moving average of $114.85. The stock is well above its 200-week simple moving average of $89.06, last tested during the weekly of July 5, 2013, when the average was $55.39.

Weekly momentum is projected to rise to 62.61, up from 54.49 on Oct. 23. Momentum scales between 00.00 and 100.00 where a reading below 20.00 is oversold and a reading above 80.00 overbought. Rising between these levels is positive, while declining between these levels is negative.

Note the vertical lines drawn on Sept. 21, 2012, and April 19, 2013. Shares of Apple declined by 45% between these dates from $100.72 and $55.01. The weekly chart for the S&P 500 (up next) will show a rise of 6.5% between these dates.

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. This level has been a magnet all year long and has been crossed many times since "Black Monday."

Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $131.03, which is a key level on technical charts until the end of 2015.

Here's the weekly chart for the S&P 500.


Courtesy of MetaStock Xenith

The weekly chart for the S&P 500 stays positive if the index closes on Friday, Oct. 30 above its key weekly moving average of 2,025.7. The S&P is well above its 200-week simple moving average of 1,742.2, last tested during the weekly of Oct. 7, 2011, when the average was 1,142.8. Weekly momentum is projected to rise to 59.70, up from 49.41 on Oct. 23.

Note the vertical lines drawn on Sept. 21, 2012, and on April 19, 2013. Between these dates, the S&P 500 rose by 6.5% from 1,460 to 1,555.

 

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