Reader Request: Hershey Making a Cycle Low

By | October 3, 2015

A reader requested an analysis of the Hershey Foods (HSY) chart.

The weekly chart shows the stock trading in a wide range above $86.00 for the last two years. During this period the support line has been established by 56 week cycle lows. There aren’t enough data points to draw any definitive conclusions, but with the stock bouncing off support, the RSI back above its centerline and the bullish MacD crossover, there are technical indications to support the idea of another cycle low.

99933.HSY

Since moving back down to the $86.00 level, the stock has been oscillating around the 50 day moving average, attempting to establish a footing. Three weeks ago it moved back above the average and held there, trading in a roughly $4.00 range above the $91.00 level. On Friday the stock was up 2.2%, opening the session on its low and closing it out just below its high. This wide opening and closing range day completely engulfed the previous three week range. It is a very bullish candle. Supporting this bullish price action is the solid money flow for the last two months, reflected on the Chaikin money flow indicator.

99933.HSYdaily

Hershey looks ready advance off its 50 day moving average and complete another cycle low. The assumption based on the previous pattern is that it will return to the upper end of the channel.

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