Let’s face it – the past six weeks have been particularly difficult, as unprecedented restrictions on gatherings and travel have virtually stopped the world in an attempt to slow the spread of the deadly coronavirus. However, hope springs eternally this Easter holiday as many countries begin to smooth the curve of the virus and slow the rate of daily infections.
In the midst of a significant number of layoffs and holidays spreading across vital sectors of the economy, many consumers should still celebrate the holidays by purchasing a range of sweet treats. In fact, the National Retail Federation (NRF) predicts that around 80% of people will celebrate the holidays despite the current health crisis. Although the group has decided not to disclose the results of its Easter 2020 spending survey conducted in recent weeks, Statista data shows that Americans spent approximately $ 2.5 billion on Easter sweets in each of the past three years.
Those looking for Easter themed trading ideas should add these top three candy stocks to their watch list. Below, we take a closer look at each company and explore the possible business configurations using technical analysis.
The Hershey Company (HSY) manufactures and sells confectionery in North America and around the world. Her popular selection of Easter sweets includes Reese’s peanut butter eggs, Hershey’s wrapped Easter eggs and Hershey’s favorite spring chocolates. Piper Sandler analyst Michael Lavery doubled the chocolate factory from “overweight” to “underweight” last month, noting that Hershey would likely benefit from increased consumer demand during the epidemic. The company’s shares have a market value of $ 21.08 billion, offer a dividend yield of 2.19% and trade up to 2.38% so far this year as of April 9, 2020.
Hershey’s shares fell to a low of $ 109.88 in March, where the price found a well-established support floor from a multi-year horizontal trend line. Since then, the title has made a V-shaped recovery and is now trading above the neck of a double-crowned pattern. Those taking a long position at current levels should place a stop loss order in the last three days of consolidation at $ 138.06 and record their profits by testing the top of the topping model near $ 160.
Mondelez International, Inc. (MDLZ)
Based in Deerfield, Illinois, Mondelez International, Inc. (MDLZ) produces and markets chocolates, gums and candies, as well as other snack and beverage products. The $ 74.04 billion business sells a wide variety of Easter chocolates through brands such as Milka, Toblerone and Cadbury. Stifel recently improved Mondelez’s stock from “buy” to “keep”, saying the confectionery could benefit from home consumption during the COVID-19 pandemic. As of April 9, 2020, the Mondelez share issues a dividend yield of 2.20% and fell 5.46% over the year.
The stock tested the top of a previous trading range during last month’s intense sale before recovering quickly. In recent trading sessions, the price has remained above a key resistance level at $ 51, which could prevent a move to the February high at $ 59.60. Before executing a trade, consider waiting for a reversal candlestick pattern, such as a hammer or piercing line, to confirm the continuation of the bullish momentum in the short term. Protect the capital with a stopper placed about two points below the entry price.
Tootsie Roll Industries, Inc. (TR)
With a market capitalization of $ 2.31 billion, Tootsie Roll Industries, Inc. (TR) manufactures confectionery products primarily in the United States, Canada and Mexico. The 124-year-old candy maker offers an impressive line of Easter products, including Tootsie roll eggs, a mix of Easter baskets, Andean rabbits, and bubble eggs. Over the past three years, the company’s quarterly earnings have fluctuated between 13 cents and 50 cents per share. Tootsie Roll stock has returned 12% since the start of the year, surpassing the confectionery industry average of 16.43% over the same period as of April 9, 2020. Investors also receive a return of dividend of 0.95%.
Tootsie Roll shares soared throughout March despite the S&P 500 showing significant losses. This decision confirms a double bottom that formed a base near a three-year horizontal support line at $ 32. Those who expect relative strength to continue should set a stop below the neck of the double bottom and use a trailing stop, like a moving average over a rapid period, to let profits run. Consider modifying the break-even point if the action approaches its historic high at $ 39.22.