HSY pushes through key technical resistance level
The Hershey Company (HSY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
HSY finished the week -0.09% lower at 130.26 after surging $2.23 (1.74%) today, notably outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HSY as at May 22, 2020):
Friday's trading range has been $2.96 (2.3%), that's slightly above the last trading month's daily average range of $2.72. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for HSY.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 129.76 (now S1), which is likely to act as support going forward. After having been unable to move lower than 127.15 in the prior session, the market found buyers again around the same price level today at 127.60.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 131.91. The last time this happened on March 19th, HSY actually lost -3.33% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 132.33 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 127.15 where further sell stops could get activated. As prices are trading close to May's high at 135.19, upside momentum might accelerate should The Hershey mark new highs for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for The Hershey. Out of 767 times, HSY closed higher 52.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.67% with an average market move of 0.46%.