HSY runs into sellers again around 146.08
The Hershey Company (HSY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, HSY finished Wednesday at 143.19 losing $1.15 (-0.8%), slightly underperforming the S&P 500 (-0.46%). Today's close at 143.19 marks the lowest recorded closing price since August 11th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 143.75, the share confirmed its breakout through the prior session low after trading up to $0.59 below it intraday.
Daily Candlestick Chart (HSY as at Sep 16, 2020):
Wednesday's trading range has been $2.92 (2.01%), that's above the last trading month's daily average range of $2.45. 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 slightly higher than usual for HSY.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
The market closed below the 50-day moving average at 143.33 for the first time since July 13th. When this moving average was crossed below the last time on June 3rd, HSY lost -0.59% on the following trading day. After having been unable to move above 146.37 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 146.08.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 147.35.
Though The Hershey is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test August's close-by low at 141.73.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for The Hershey. Out of 230 times, HSY closed higher 60.00% 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 61.74% with an average market move of 1.12%.