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The stock market started the year on a positive note after a year filled with macroeconomic and geopolitical challenges.
The rally was driven by the Federal Reserve’s smallest rate increase since the beginning of the monetary policy tightening in March 2022 and Fed Chair Jerome Powell’s acknowledgment that inflation was showing encouraging signs.
However, investor sentiment has taken a hit lately as minutes from the central bank’s monetary policy meeting indicated that the rate hikes will not end anytime soon. The Fed officials believe interest rates need to increase and stay elevated until inflation reaches 2%.
The officials’ resolve was backed by the 0.6% sequential and 5.4% year-over-year rise in the Personal Consumption Expenditure (PCE) and the hotter-than-expected jobs report. The market expects the Fed to raise the fund rate beyond 5% this year.

However, JPMorgan CEO Jamie Dimon believes a soft landing is “still possible.” Goldman Sachs believes the chances of the American economy slipping into a recession are now just 25%, down from its previous estimate of 35%. Moreover, President Joe Biden recently said he believes the U.S. economy will not fall into a recession this year or next.
Given this backdrop, it could be wise to make the most of the strong uptrend in fundamentally strong stocks, The Hershey Company (HSY), Acuity Brands, Inc. (AYI), and Flowers Foods, Inc. (FLO).
The Hershey Company (HSY)
HSY engages in the manufacture and sale of confectionery products and pantry items. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International.
It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, baking ingredients, toppings, beverages, and sundae syrups; and snack items.
On November 10, 2022, HSY announced that it would build a 250,000-square-foot chocolate facility in Hershey, Pa. The facility would support the production capabilities of its popular brands like Reese’s, Kit Kat, and Hershey’s. The expansion would enable the company to meet the fast-growing demand.
In terms of the trailing-12-month levered FCF margin, HSY’s 12.18% is 382.1% higher than the 2.53% industry average. Its 4.99% trailing-12-month Capex/Sales is 56.5% higher than the 3.19% industry average. Likewise, its 0.98x trailing-12-month asset turnover ratio is 16.8% higher than the industry average of 0.84x.
In terms of forward EV/S, HSY’s 4.78x is 188.9% higher than the 1.66x industry average. Its 11.89x forward P/B is 301.8% higher than the 2.96x industry average. Likewise, its 4.37x forward P/S is 278.8% higher than the 1.15x industry average.
For the fiscal fourth quarter ended December 31, 2022, HSY’s net sales increased 14% year-over-year to $2.65 billion. Its non-GAAP gross profit increased 14.6% year-over-year to $1.16 billion. The company’s non-GAAP operating profit rose 16.7% year-over-year to $555.35 million. Also, its non-GAAP net income increased 18.6% year-over-year to $417.11 million.
Analysts expect HSY’s EPS and revenue for the quarter ending March 31, 2023, to increase 5.7% and 8.5% year-over-year to $2.67 and $2.89 billion, respectively. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 17.1% to close the last trading session at $239.22.
HSY’s stock is trading above its 50-day and 200-day moving averages of $230.59 and $225.23, respectively, indicating an uptrend.
According to MarketClub’s Trade Triangles, HSY’s long-term trend has been UP since December 8, 2022, while its intermediate-term trend has been UP since February 2, 2023. On the other hand, its short-term trend has been DOWN since February 24, 2023.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, intense swings in price.
In terms of the Chart Analysis Score, another MarketClub proprietary tool, HSY, scored +75 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating short-term weakness. However, it remains in the confines of a long-term uptrend.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for HSY.
Acuity Brands, Inc. (AYI)
AYI provides lighting and building management solutions worldwide. The company operates through two segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG).
In terms of trailing-12-month EBIT margin, AYI’s 12.58% is 30.8% higher than the industry average of 9.62%. Likewise, its 14.87% trailing-12-month EBITDA margin is 12% higher than the industry average of 13.27%. Furthermore, the stock’s 1.16x trailing-12-month asset turnover ratio is 45% higher than the industry average of 0.80x.
In terms of forward non-GAAP P/E, AYI’s 14x is 20.2% lower than the 17.54x industry average. Its 9.91x forward EV/EBITDA is 10% lower than the 11.02x industry average. Likewise, its 10.78x forward EV/EBIT is 29.1% lower than the 15.21x industry average.
AYI’s net sales for the fiscal first quarter that ended November 30, 2022, increased 7.8% year-over-year to $997.90 billion. Its non-GAAP net income increased 6.1% year-over-year to $107.50 million. The company’s non-GAAP operating profit increased 5.3% year-over-year to $140.10 million.
Moreover, its adjusted EBITDA increased 4.1% year-over-year to $153 million, while its non-GAAP EPS came in at $3.29, representing a 15.4% increase from the prior-year quarter.
Analysts expect AYI’s EPS and revenue for the quarter ending February 28, 2023, to increase 6.1% and 5.5% year-over-year to $2.73 and $958.98 million, respectively. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters. The stock has gained 16.5% year-to-date to close the last trading session at $192.94.
AYI’s stock is trading above its 50-day and 200-day moving averages of $179.85 and $174.05, respectively, indicating an uptrend.Trade Triangles show that AYI has been trending UP for all three-time horizons. The long-term for AYI has been UP since August 16, 2022, while its intermediate-term trend has been up since January 9, 2023, respectively. Its short-term trend has been UP since February 27, 2023.
Source: MarketClub
In terms of the Chart Analysis Score, AYI scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend will likely continue.

Click here to see the latest Score and Signals for AYI.
Flowers Foods, Inc. (FLO)
FLO produces and markets packaged bakery products in the United States. It offers fresh bread, buns, rolls, snack cakes, tortillas, frozen bread, and rolls under the Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley’s, and Tastykake brand names.
On February 20, 2023, FLO announced that it had completed the acquisition of Papa Pita Bakery, a manufacturer and distributor of high-quality bagels, tortillas, breads, buns, English muffins, and flatbreads. Papa Pita Bakery will operate as an independent subsidiary of FLO.
FLO’s President and CEO Ryals McMullian said, “Papa Pita has been an important co-manufacturer of Flowers products for many years, and we expect the acquisition to drive further manufacturing and distribution synergies.”
In terms of the trailing-12-month gross profit margin, FLO’s 47.94% is 51.7% higher than the industry average of 31.61%. Likewise, its 3.67% trailing-12-month levered FCF margin is 45.3% higher than the industry average of 2.53%. Furthermore, the stock’s 1.46x trailing-12-month asset turnover ratio is 75.3% higher than the industry average of 0.84x.
In terms of forward EV/Sales, FLO’s 1.35x is 18.4% lower than the 1.66x industry average. Its 13.30x forward EV/EBITDA is 18.6% higher than the 11.21x industry average. Likewise, its 19.20x forward EV/EBIT is 25.3% higher than the 15.32x industry average.
FLO’s net sales increased 10.1% year-over-year to $1.08 billion for the fourth quarter ended December 31, 2022. Its net cash provided by operating activities rose 136% from the prior-year quarter to $69.36 million.
The company’s adjusted EBITDA increased 8.5% year-over-year to $96.18 million. Also, its adjusted net income increased 14.9% year-over-year to $48.12 million. In addition, its adjusted EPS came in at $0.23, representing an increase of 15% year-over-year.
Analysts expect FLO’s revenue for the quarter ending March 31, 2023, to increase 8% year-over-year to $1.55 billion. Its EPS for fiscal 2024 is expected to increase 9.1% year-over-year to $1.37. It surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past month, the stock has gained 6.1% to close the last trading session at $28.33.

FLO’s stock is trading above its 50-day and 200-day moving averages of $28 and $27.32, respectively, indicating an uptrend.Trade Triangles show that FLO has been trending UP for two of the three-time horizons. FLO’s long-term trend has been UP since October 28, 2022, while its intermediate-term trend has been UP since February 17, 2023. On the other hand, its short-term trend has been DOWN since February 27, 2023.
Source: MarketClub
In terms of the Chart Analysis Score, FLO scored +75 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating short-term weakness. However, it remains in the confines of a long-term uptrend.

Click here to see the latest Score and Signals for FLO.
What’s Next for These Stocks?
Remember, the markets move fast and things may quickly change for these stocks. Our MarketClub members have access to entry and exit signals so they’ll know when the trends starts to reverse.
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Best,The MarketClub Team[email protected]

It is time to update the crypto charts as I spotted a strong alert in two major coins for you.
It is ironic that the signal comes from the same indicator that accurately predicted the rally of Bitcoin last November when the price was around $16k.
Source: TradingView
Indeed, the main coin has rallied for whopping 52% after the signal topping slightly above $25k. The previous peak of August 2022 at this level unexpectedly acted as a strong barrier that the price couldn’t overcome.

In my recent update last month I warned that “the bullish impulse should not fade until it touches the moving average around $27k to convince the trading community”.
Unfortunately for bulls, the rally has faded below the target. However, the majority of readers did not see this rally as a sign of a global market reversal.
This time, the same RSI indicator doesn’t confirm the most recent peak on the price chart as it shows a lower top. This is called a Bearish Divergence.
The price has already plummeted $2k from the maximum of this month as the signal plays out. The indicator’s reading is on the edge of 50 and further collapse would send more downside pressure on the market. This time the alert appears on the daily chart, though its magnitude could not be as strong as November that occurred on a higher weekly time frame.
The nearest support at $21.3k is located in the valley of this month. After that, there are no significant levels as the price could retest the low of 2022 at $15.5k to reverse all gains of this second leg of pullback.
The top of 2019 at $14k could fortify this support. The round number and psychologically important level of $10k could be the strongest support among those mentioned here.

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Let us move on to the chart of the second largest coin, Ethereum.
Source: TradingView
This time I switched to a Weekly time frame as I spotted another pattern for this coin – in the daily chart it has the same Bearish Divergence on the RSI sub-chart as Bitcoin does.
The combination of rising valleys and falling peaks has shaped a well-known Triangle pattern (orange).
The upside target for the pattern is located at the distance of the widest part of Triangle added to the breakup point at $2,900.

In the middle of the month, the price has failed to pass through the double barrier at $1,750 consisting of purple moving average and the pattern’s upper trendline.
If price fails to crack the resistance, the following drop should break below the downside of the Triangle around $1,200.
The bearish target is located at $60, which means almost total annihilation of Ethereum. This is the second pattern that signals the same target as outlined in my post titled “Crypto Apocalypse?” last May.
That time, the Bearish reversal Head & Shoulders pattern was forming. I added it in pink to the current chart above as a reminder.

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.
Click Here to learn more about Reitmeister Total Return

I have been bearish since May 2022. However, I have to admit that the early 2023 evidence did increase the odds of a potential return to a bull market.
That party is over!
Let’s discuss the increasing evidence that bears are ready to come out of hibernation with much more downside to follow. And yes, this will come hand in hand with a trading plan to stay on the right side of action.
Market Commentary
Plain and simple, stocks rallied on a false premise to start 2023.
That being some signs of moderating inflation that could lead the Fed to end their rate hiking regime earlier than expected. This soft landing scenario compelled more investors to believe that bottom was already established and time to bid up stocks for the birth of the next bull market.
The Fed whole heartedly repudiated this idea at the February 1st meeting. They saw inflation as too sticky with no plans to change their hawkish course with higher rates in place through year end.
Bulls were clearly huffing aerosol paint cans at the time because they rallied on the false notion these statements were somehow dovish. The best I can figure out is that because Powell was not pounding the podium and foaming at the mouth that he was somehow dovish.
Clearly not true.
Since then more investors have gotten the memo that the early year rally was premature. Especially after Thursday when the Producer Price Index showed that inflation is much higher than expected.
I saw that event as Strike 3 for bulls as it came on the heels of 2 other events showing inflation being much higher than expected.
Strike 1 was on Friday February 3rd when the monthly jobs report was far too robust. Not just 517K jobs added when only 190K was expected. But even more insipient was the strength of wage increases…which is exactly the kind of sticky inflation Powell warned about just two days prior.
Connected to this event was the subsequent interview of Powell at The Economic Forum in DC. There he was asked what this robust jobs report meant for Fed policies. He could not have been clearer that it makes him even more hawkish.
Specifically, that it likely will compel the Fed to do 2 possible things. First, to push rates higher than the previous expected 5% level. Second, keep those high rates in place longer than the end of the year that was previously stated. And maybe both!
This caused a very momentary sell off in stocks. But bulls took another hit from their aerosol cans in hopes that the 2/14 CPI report would be a Valentines gift to bulls. Unfortunately, it was actually a deadly arrow through the heart with yet more proof that inflation is too hot.
This set the stage for last Thursday’s PPI report. As already shared, that was a devastating Strike 3 for bulls.
We heard that message loud and clear by adding two more inverse ETFs to our portfolio. That was a prudent move as the S&P 500 has slipped -2.9% since the Thursday open. Gladly our 2 inverse ETFs are doing even better at +3.3% and +4.9%.
The curiosity at this point is whether the overall market is truly ready to get back into bear territory. Or are we just exploring the bottom end of the current S&P 500 (SPY) trading range between 4,000 and 4,200???
If bears really are back in charge now, then we would first see an extension of the recent sell off become a break under the 200 day moving average at 3,942. That would sound a FOMO style alarm for many other investors to reverse their misguided bullish notions to now sell, Sell, SELL.
Other notable spots on the way down would be:
3,855 that is 20% down from the all time highs further re-affirming the bear market outlook.
3,491 the October Lows
3,180 represents a 34% decline from the all time highs which represents the average drop for the market during a bear market.
Let’s not get too far ahead of ourselves.
The point being that bulls have taken a few on the chin. They are not down and out…but they are looking quite wobbly.
At this stage we continue to monitor each new economic event to see what it tells us about the health of the economy as well as inflation and future Fed action.
The more these tilt bearish…the sooner we will hit some of those lower targets noted above…and the more money we will make on the way down given the construction of our portfolio for resumption of the bear market.
What To Do Next?
Watch my brand new presentation: “Stock Trading Plan for 2023” covering:

Why 2023 is a “Jekyll & Hyde” year for stocks
How the Bear Market Could Come Back with a Vengeance
9 Trades to Profit Now
2 Trades with 100%+ Upside Potential as New Bull Emerges
And Much More!

Get It Now! Stock Trading Plan for 2023 >
Wishing you a world of investment success!
Steve Reitmeister… but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com & Editor, Reitmeister Total Return

About the Author
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.