This is a special week for golf lovers. The Masters, the first of the four major golf tournaments of the year, begins tomorrow at the Augusta National Golf Club.
There is a good chance this year’s winner of the coveted “green jacket”, may use a product by Acushnet Holdings (GOLF). The company manufactures and distributes Titleist golf balls and golf clubs, FootJoy golf shoes and apparel, and Scotty Cameron brand putters.
Acushnet shares are up 60% over the last seven months. They came off their highs slightly in March and the pullback helped form a bullish flag pattern on the daily chart. On Wednesday the stock price moved above flag resistance and closed near the highs of the session.
The flag pattern projects an upside price target which is measured by taking the height of the flagpole and adding it to the breakout point. It suggests a move to the $29 area, a nearly 15% gain in the share price.
The relative strength index has been above its center line since February and Chaikin money flow is solidly in positive territory. A bullish combination of positive price and money flow momentum.
An additional component of trade is the 35% short interest in the stock. The potential for additional upside could initiate a “covering” rally as those shorts abandon their positions and buy the stock back. A dynamic that can feed on itself.