HSY still stuck within tight trading range
The Hershey Company (HSY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HSY finished the month 12.18% higher at 145.41 after gaining $0.12 (0.08%) today, underperforming the S&P 500 (0.77%). Trading up to $1.56 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HSY as at Jul 31, 2020):
Friday's trading range has been $2.06 (1.42%), that's slightly below the last trading month's daily average range of $2.39. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for HSY. Prices continued to consolidate within a tight trading range between 143.41 and 146.83 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Hanging Man and the Last Engulfing Top Pattern which are both known as bearish patterns. The last time a Last Engulfing Top Pattern showed up on January 23rd, HSY actually gained 0.55% on the following trading day.
Prices are trading close to the key technical resistance level at 146.83 (R1). After having been unable to move above 145.68 in the previous session, The Hershey ran into sellers again around the same price level today, failing to move higher than 145.47.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 146.83 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for The Hershey. Out of 772 times, HSY closed higher 52.33% 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 58.42% with an average market move of 0.44%.