Unwrapping The Numbers - A Deep Dive Into Hershey's 21% Decline From Its All-Time Highs And What It Means For Investors

• Hershey's stock experienced robust growth in 2021 and 2022, with increases of 26% and 20%.
• The stock reached an all-time high of $276 in May 2023 before breaking through significant support levels.
• The next critical support level to watch is the psychological level of $200.

Hershey Co (NYSE: HSY) experienced strong growth in 2021 and 2022, with its stock prices rising by 26% and 20%, respectively. However, the recent performance of Hershey's stock has been quite volatile.

In 2023, the stock price experienced a significant change. The year began on a positive note, with the stock price rising by 20% between January and May, reaching its highest-ever value of $276.

This period of optimism was short-lived, as the stock's performance reversed sharply after May.

The stock price turned bearish, and the situation worsened in July when it plummeted by 6%.

This decline was noteworthy for two reasons, it broke through the 2022 high of $242 and also surpassed the daily 200 simple moving average, which was at the same level.

The downward trend continued in August, with a further 7% drop in the stock price. Multiple support levels breaking is a warning signal for any stock, including Hershey. The stock has now declined a total of 21% from the all-time high.

The crucial level to monitor now is the November 2022 low at $211. If the stock cannot hold at this level, there is a high probability that the price will drop to the psychological level of $200.

Considering the stock has already dropped by 22% from its all-time high, it seems likely that there could be more downside ahead.

Although Hershey has recently experienced a significant decline, it could pay off to remain optimistic.

Looking back at a similar period between September 2019 and March 2020, the stock went through a 31% decline but eventually bounced back with a remarkable 151% rise, indicating a strong bullish trend.

This historical precedent suggests that the current market downturn may be brief and followed by a strong rebound.

After the closing bell on Friday, September 1, the stock closed at $213.85, trading down by 0.47%.