HES In Distribution

Major market indices are bouncing as anticipated, although the speed is slightly quicker than expected. The S&P 500 index is close to major resistance, therefore, a halt to the rally is expected if the markets are to continue lower.

Monitor selling opportunities and short positions already initiated. If resistance is violated in the major market indexes, protective stops will likely trigger in individual names. Outlined below is a potential setup in Hess Corporation (HES). 

The end of the uptrend in HES was signaled by a break of the 50-day simple moving average and a break of the intermediate up trend line. There is a potential bearish head and shoulders forming which could trigger with a break of the neckline at $76.

It is important to note that a head and shoulders pattern will only be formed if there is an actual break of the neckline. Trigger: confirmed break of the neckline, at 76 dollars. Target:  minimum expected objective is $65, obtained by measuring the height of the pattern, Protective Stop: will trigger if there is a confirmed move back above the neckline.

chart

UPDATES:

Hershey Co. (HSY):  http://www.businessinsider.com.au/skor-with-hershey-tgi-not-so-triumphant-2011-2 –  Protective stops may be trailed to a close below the recent pivot low at $52.22. 

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Disclaimer: The information contained herein is not guaranteed. This is not a solicitation of any order to buy or sell. This material is based upon information that I consider to be reliable, but I do not guarantee its completeness or accuracy. Assumptions, opinions and recommendations contained herein are subject to change without notice, and I am not obligated to update the information contained herein. I have positions in HES and HSY. This communication, including any attachments, is for the exclusive use of the intended recipient(s) and/or the intended recipient’s designees. Any use, retention or dissemination by a person other than the intended recipient is strictly prohibited. If you are not the intended recipient or designee, please notify the sender immediately by return e-mail and delete/destroy all copies of this communication.

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