Conclusion, Investment Implications, Strategy
The Hershey Company (HSY) appears to be resuming its June advance following two months of sideways investor indecision. A sustained rise above the $151.30 area would help confirm this and target an additional 11% rise to $169.00 per share.
Analysis and Rationale
The Hershey Company (HSY), together with its subsidiaries, manufactures and sells confectionery products. The company operates through two segments, North America; and International and Other. The company provides its products primarily under the Hershey’s, Reese’s, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Lancaster, Payday, Rolo, Twizzlers, Whoppers, York, Scharffen Berger, Dagoba, Ice Breakers, Breathsavers, Bubble Yum, SkinnyPop, Pirate’s Booty, Oatmega, Paqui, ONE, and Krave brands, as well as under the Pelon Pelo Rico, IO-IO, Nutrine, Maha Lacto, Jumpin, and Sofit brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The Hershey Company was founded in 1894 and is headquartered in Hershey, Pennsylvania.
Chart 1 below plots HSY daily since June, highlighting its current breakout higher from two months of sideways investor indecision. Despite this week’s volatility in many individual stocks, HSY has been able to sustain this breakout for the past three sessions. A sustained rise above the upper boundary of the indecision area, currently at $151.30, would confirm the breakout and target an additional 11% rise to $169.00 per share.
Chart 1
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $146.81 area, a long entry price of $152.36 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 3.6%.
Table 1
Click Here for a table containing all of our current stock, ETF and index ideas.
Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.