Something interesting to share:
Shares of Callaway Gold Co. (ELY) shot up 12% toward a 6 1/2-month high in morning trade Thursday, after the golf equipment maker disclosed that hedge fund Jana Partners LLC had acquired a 9.2% stake, which would make Jana the second- largest shareholder. Jana said in a filing with the Securities and Exchange Commission that it acquired the stake because it believed the shares are "undervalued and present an attractive investment opportunity." Jana said that while Callaway been able to drive innovation and gain market share, "other factors" have caused the stock to underperform. As a result, Jana said it intends to have discussions with Callaway's board of directors and management regarding strategic alternatives, including exploring a divesting of assets or a sale of the company. In its most recent 13F filing, Jana said it didn't own any Callaway shares as of March 31 . Callaway's stock has lost 11% over the past 12 months, while the S&P 500 has gained 4.3%.
If you look at the price and volume chart of ELY, you can see evidence of collection prior to the lead up to yesterday's surge. In particular, the price candle and volume on 31 May and the subsequent ones there after were quite telling. On 31 May, if the price were to head lower on the back of a drastic increase in volume, there should be a widespread bearish candle. Instead, we have a rather narrow bullish candle - just shows that someone is collecting from all the sellers. The collection probably stopped on 6 june and we have a signalling to the markets by way of an announcement. Large volume surges typically precedes a move.
