-- Apple stock is a bit lower after the earnings report. How will it trade from here? Check the chart for hints. --
Apple (AAPL) isn't saving the markets on Friday, but it's not delivering the other half of the one-two punch that could have crushed the markets either.
In other words, while Apple's 2.5% post-earnings dip is somewhat disappointing, if it fell more than 15%, as Amazon (AMZN) is doing today, the market would have a really tough time staying afloat.
That's particularly true as the volatility index remains elevated.
As for Apple, many were hoping a post-earnings rally - like the one in Microsoft (MSFT) - Get Microsoft Corporation Report - would help alleviate some of the selling pressure.
For its part, Cupertino actually delivered solid results, as Chief Executive Tim Cook continues to navigate the supply-chain issues pretty well. That said, the supply-chain situation in China did have management issuing a cautious note.
The company reported better-than-expected earnings and revenue results, while its iPhone did better than expected. Still, investors on Friday aren't fully convinced. Will they change their tune?
Looking at the chart above - which is a daily chart with weekly overlays on it - it's clear that Apple has responded well to tests of the 50-week moving average.
It dipped down into this measure in mid-March before going on a monstrous 11-day rally and helped lead the market out of despair. The second test came earlier this week and the bounce is not nearly as impressive. At least not yet.
Apple shares this morning rallied up to the 50-day moving average and were rejected, without even getting up to the 50% retracement or the 21-day.
From here, a retest of the $155 area is not out of the question. It will be key to see, however, whether Apple stock can hold this area - along with the 50-week moving average - going forward.
If it can't, we could be looking at a retest of the first-quarter and 2022 low down near $150. If that fails, then we could see a dip down into the high-$130s, which was prior resistance and, most recently, support in late 2021.
Maybe that's the type of breakdown that the market needs in order to find a bottom. As they say, the strongest always fall last.
On the upside, $167.50 is the level Apple stock needs to clear. Above that opens the door to $170-plus. Above $175 puts resistance near $180 in play.