- Hershey’s stock broke below a key technical support zone, triggering bearish momentum on the monthly chart.
- The steep drop has raised concerns, with the next support level identified at $133, last tested in 2020.
- Analysts suggest recovery is unlikely unless the price moves back above the critical $213.60 Kijun-Sen level.
Hershey Company’s stock plunged by 10.76% in January, breaching the Ichimoku cloud on its monthly chart, signaling bearish momentum. The stock closed at $151.12, down from previous support levels, marking its most monthly drop since 2020. The technical breakdown has triggered concerns among traders and long-term investors alike.
$HSY monthly#Hersheys doesn\'t kiss the Ichimoku cloud#Hersheys penetrates the Ichimoku cloud
Holy crap pic.twitter.com/n7pxI4Dk44— Cantonese Cat 🐱🐈 (@cantonmeow) January 23, 2025
Ichimoku Cloud Penetration Signals Bearish Momentum
Hershey’s monthly chart revealed a decisive drop below the Ichimoku cloud, which typically acts as a critical support zone. The Ichimoku cloud, calculated using past and future price averages, serves as a key indicator of market trends. Hershey’s recent breach below the cloud suggests a potential shift toward prolonged bearish activity.
Additionally, the stock price fell far below the Tenkan-Sen (conversion line) and Kijun-Sen (base line). These levels, at $181.12 and $213.60 respectively, are key indicators of equilibrium in the short and medium term. By closing at $151.12, Hershey’s price has invalidated these levels, intensifying market concerns.
Such a penetration of the Ichimoku cloud is a rare occurrence for Hershey and raises questions about its ability to recover.
Historical Context and Support Levels
Hershey’s performance mirrors market volatility not seen since the correction periods of 2015 and 2020. However, unlike previous downturns, this decline comes after a prolonged bullish trend that saw the stock peak near $276.
Key support levels are now being monitored closely by analysts. The next significant support lies at $133, a historical level last tested in 2020. Beyond this, further declines could push Hershey’s price toward psychological thresholds like $120.
This dramatic decline has created uncertainty about Hershey’s near-term market performance. What factors could drive recovery, or is a deeper correction imminent?
Analyst’s Take on the Situation
TradingView analyst Cantonese_Cat described the event succinctly, remarking, “Hershey doesn’t kiss the Ichimoku cloud; Hershey penetrates the Ichimoku cloud. Holy crap.” The commentary highlights the gravity of the technical breakdown.
Traders are advised to watch for any reclaim of the Kijun-Sen at $213.60, which could indicate potential recovery. However, the steep drop below the Ichimoku cloud remains a concerning signal for long-term investors.