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Apple Would Likely Test All-Time Highs On The Back Of Momentum Following Blowout Earnings

|Includes: Apple Inc. (AAPL)

Apple Inc. (NASDAQ:AAPL) reported profits in the second quarter of $11.6 billion, or $12.30 per share. That was nearly double the profits of $6 billion, or $6.40 per share, a year ago. Analysts had been expecting earnings of $10.07 per share. The company's stock price has become a very large part of the Nasdaq market and a driving force behind the S&P 500 index.

The price of the stock surged in afterhours trading and continued to move higher during most of the daily trading session. The stock fluctuated between a high of more than 10% to a low of up 8%. The strong upward momentum is likely going to create the force needed to test resistance near the recent highs of $644.

Support on the stock is seen near the 20-day moving average, which the stock pierced on Wednesday at $608. Additional support is seen near the 50-day moving average near $574. Additionally, there is a significant upward sloping trend line that connects the November low to the December and January lows, that created a slop that measures support near $550.

Momentum will likely reversed but the recent slide created significant negative momentum for the stock in the form of the MACD. Monday's trading session printed a recent low on the MACD in of -6.44, which means that the spread (the 12-day moving average minus the 26-day moving average is significant under the 9-day moving average of the spread.

The RSI (relative strength index, which measures overbought and oversold signals), moved from 35, which is the low end of the neutral range, to nearly 58.

Disclosure: I am long AAPL.