Hershey's Stock Surges 3.45% on Four-Day Rally as Technical Indicators Signal Strong Bullish Momentum

The Hershey (HSY) has surged 3.45% in the most recent session, extending a four-day rally with a cumulative gain of 5.22%. This strong price action suggests a potential continuation of the bullish trend.
Candlestick Theory
The recent four-day rally has formed a bullish pattern characterized by higher highs and higher lows, indicating strong buying pressure. Key support levels appear to be forming near the 180.00–181.50 range, where the price has previously found buyers during pullbacks. Resistance is now likely clustered around 188.00–189.00, as the stock has tested this area multiple times in the past month. A break above 189.00 could target the next psychological level at 195.00, while a failure to hold above 180.00 may trigger a retest of the 175.00–177.00 support zone.

Moving Average Theory
Short-term moving averages (50-day and 100-day) are trading above the 200-day MA, confirming a bullish trend. The 50-day MA currently sits at ~178.50, while the 200-day MA is at ~172.00, suggesting the stock is in a medium-term uptrend. However, the 100-day MA (~176.00) is converging with the 200-day MA, which may signal a potential slowdown in momentum if the 50-day MA flattens. A crossover of the 50-day MA below the 100-day MA would raise caution, but for now, the multi-timeframe alignment supports a bullish bias.
MACD & KDJ Indicators
The MACD histogram has shown a positive divergence, with the line crossing above the signal line and expanding in recent sessions, reinforcing the bullish momentum.

The KDJ indicator (stochastic oscillator) indicates overbought conditions, with the %K line at 78 and %D at 72, suggesting a possible near-term pullback. However, the KDJ's alignment with the MACD’s strength implies that any correction may be shallow, as the stochastic oscillator is unlikely to trigger a bearish signal unless the price closes below the 10-day MA (~185.00).
Bollinger Bands
Volatility has expanded in recent sessions, with the price trading near the upper Bollinger Band (~188.50–189.00), a classic overbought signal. The bands themselves have widened from a previous contraction in early December, indicating a breakout phase. If the price closes above the upper band, it could extend the trend, but a reversal below the middle band (~184.00) would increase the likelihood of a consolidation phase.
Volume-Price Relationship
Trading volume has surged in tandem with the recent rally, with the most recent session seeing ~2.2 million shares traded, a 30% increase from the prior week’s average. This volume validates the strength of the price move and reduces the risk of a premature reversal. However, a divergence between volume and price (e.g., declining volume during a new high) would warrant caution, though no such divergence is currently evident.

Relative Strength Index (RSI)
The 14-day RSI is at ~68, approaching overbought territory. While this suggests a potential pullback, it is not yet a definitive warning signal. Historically, HSY has maintained RSI above 60 during strong uptrends, so a move above 70 could be tolerated if the price continues to make higher highs. A drop below 60 would indicate weakening momentum, but this is unlikely without a breakdown in key support levels.
Fibonacci Retracement
Applying Fibonacci levels to the recent 180.00–188.11 range, key retracement levels at 184.00 (38.2%), 181.50 (61.8%), and 180.00 (78.6%) are critical. The stock has tested the 61.8% level twice in the past two weeks, with buyers stepping in both times. A break above 189.00 would target the 195.00 level (127.2% extension), but this requires sustained momentum and volume.
Conclusion
Confluence between bullish candlestick patterns, aligned moving averages, and strong volume supports a continuation of the uptrend. Divergences in the KDJ and RSI suggest caution for short-term overbought conditions, but these are consistent with a healthy rally in a trending market. Traders should monitor the 188.00–189.00 resistance zone for a potential breakout or a pullback to 184.00–185.00 as a key support cluster. Probabilistically, the bias remains bullish in the near term, with a 60–70% likelihood of holding above 180.00 through the next 1–2 weeks.