3 Reasons To Dump Hershey’s on Valentine’s Day
- Posted by Greg Harmon
- on February 14th, 2013
Hershey’s, $HSY, has had a great run higher going back through early 2011. But after going steady with it for over two years it is time to dump it this Valentine’s Day. Let me explain why. The chart below gives 3 solid indications that a short term top is in. And past history shows that when that happens it just mopes around for 3 to 4 months. Who wants to be with a moping stock for 3 months. First look at the price action. It has moved up a perfect $10 since the last base, coinciding with the Measured Move and is extended from the 50 day Simple Moving Average (SMA). Next, the
Relative Strength Index (RSI) is peaking over 70, into overbought territory. Yes it can continue to become much more overbought but history (the red hats on chart) for Hershey’s is that this level is about it. Finally the Moving Average Convergence Divergence (MACD) signal line has hit an extreme, where the last consolidation occurred with the histogram about to move to negative. You may be able to get another dollar out of this stock but its rhythm, its history, suggests that it is time to play the field for a while. Enjoy your freedom. It is Valentine’s Day, maybe you will get lucky.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- SPY Trends and Influencers April 25, 2015
- Macro Week in Review/Preview April 24, 2015
- Protect your Apple Stock through Earnings
- Forget the stock market adage buy low and sell high
- Unlocked: Amazon and Starbucks premium earnings trades
- Dressing an earnings trade in Hanesbrands
- Premium Earnings 4-23-15
- Technical Analysis is Hogwash in the Long Term
- Unlocked: Facebook and Skechers earnings trades
- Dialing up an earnings trade for Select Comfort