Hershey’s is Looking Tasty Again

• Posted by Greg Harmon
• on August 17th, 2016

Remember at the end of June when Mondelez made a $23 billion takeover bid for Hershey ($HSY)? The stock jumped from around $96 to $112. It was quickly rejected and the news turned to all the problems with the Trust running the company. I kept the stop on my radar after that waiting for signs of a pullback. But they never came. In fact I started to make comments in the weekly review that the stock looked more like it was ready for another move higher.

That move looks like it is underway right now. The chart below shows how a pop higher to consolidation between 108 and 112 has now started to drift to the upside. The momentum indicators are improving. The RSI is turning back higher and the MACD is starting to level and remains positive. The Bollinger Bands® have tightened back to the point just before the move higher started back in May.

A Measured Move higher would target 125 above. There is some interest information in the longer dated November and January Calls as well. The biggest open interest in November is at the 120 Call Strike and in January there is big open interest at the 119 and 130 Strikes. There is also open interested accumulated from 90 to 105 on the Put side in January. September monthly options are big near the current price with big open interest at the 110 Calls and 115 Puts.

None of this means that anything will happen with this stock but there does seem to be a lot of upside interest after the September expiry. And the price and momentum are shifting higher. If you forget about the prior narrative and just followed price you would buy this stock for a break out now. So……

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