Hershey's Surges 4.56% on Bullish Technical Signals, Breaks Above Key Resistance Levels

The Hershey (HSY) has experienced a 4.25% surge over two consecutive sessions, closing at $193.45 with a 4.56% cumulative gain. This recent bullish momentum aligns with key technical signals across multiple frameworks. Candlestick Theory reveals a potential bullish reversal pattern near the $184.26 support level, marked by a hammer-like formation on 2025-09-15. The price has since broken above the $187.36 resistance, establishing a new short-term ceiling. Critical support levels include $184.26 and $179.99, while resistance clusters at $187.36 and $188.85.

Moving Average Theory shows the 50-day MA (calculated at approximately $178.50) and 200-day MA (around $170.50) in a bullish alignment, with the current price above both. The 100-day MA ($175.50) further reinforces the upward bias. However, the 50-day MA is approaching convergence with the 100-day MA, signaling a potential slowdown in momentum if the 200-day MA is not decisively breached.

MACD & KDJ Indicators present mixed signals. The MACD line crossed above the signal line on 2025-09-10, confirming a short-term bullish trend. The KDJ indicator formed a Golden Cross on 2025-09-12, aligning with the recent price surge. However, the RSI (discussed below) suggests overbought conditions, creating a divergence that may foreshadow a retracement. The KDJ-based backtest (discussed later) highlights the strategy’s limited efficacy, with a low Sharpe ratio indicating poor risk-adjusted returns.

Bollinger Bands reflect heightened volatility, with the price currently near the upper band. Band expansion from late August to early September suggests a sustained breakout, but the narrowing bands observed in mid-August may have acted as a consolidation phase before the recent rally. The price’s position near the upper band raises caution about overextension.

Volume-Price Relationship validates the recent upmove, as trading volumes spiked on 2025-09-16 (2.8M shares) and 2025-09-15 (0.94M shares), exceeding the 90-day average. However, the volume on the breakout day (2025-09-16) was not significantly higher than preceding bullish sessions, suggesting the move may lack robust follow-through.

Relative Strength Index (RSI) stands at over 70, indicating overbought territory. While this aligns with the recent sharp rally, the RSI has not formed bearish divergences yet. A pullback below 60 would likely signal weakening momentum, but given the stock’s strong fundamentals and recent earnings, a sideways consolidation within overbought levels is plausible.

Fibonacci Retracement levels highlight critical psychological thresholds. The 38.2% retracement level at $188.50 and 50% level at $186.00 may act as support if the price corrects. The 61.8% level ($183.00) is a deeper test for the trend’s sustainability.

Backtest Hypothesis

The KDJ-based strategy of buying on Golden Crosses and selling on Death Crosses yielded a 7.05% return but underperformed the benchmark by 34.46%. The strategy’s low Sharpe ratio (0.14) and 13.88% volatility suggest it is highly speculative, with limited risk management. The maximum drawdown of 0% is anomalous and likely due to the strategy’s short testing period or favorable market conditions during the test window. While the recent Golden Cross on 2025-09-12 aligns with the price action, the strategy’s historical performance underscores its unreliability for long-term trading.