45 Days

45 Days

April 23, 2019 Off By Chuck

As hard as this is to believe, twinkies don’t have an almost perpetual shelf life like the movie Wall-E lead us to believe. Nor would they be safe as a food source after going through a nuclear holocaust as rumor would have. Instead, as their makers of the “Gold Bar” promise, they are only good for 45 days after manufacture. Some readers might not even be aware (or care) that after the original owner (Hostess) went bankrupt, they were resurrected and found there way back to American grocery shelves back in 2013. As all good capitalists, their new owner took the brand public back in 2015 under the ticker of TWNK. Makes sense.

Fast forward to today and while TWNK has not garnered a lot of love from the investment community since going public again, it is currently setting itself up for a nice move higher. As you can see in the chart below, RSI momentum is in the bullish zone, holding above 50 and unwinding a short-term overbought condition. Price is currently consolidating after a strong move higher, above bullishly aligned moving averages (50 above the 200. The two most recent spikes in volume were large green bars indicating institutional buying. Notice also, price has not filled the gap created from last August. From a pattern standpoint, TWNK has taken on the look of a bull flag which provides an upside target, T1, of 15% back near the highs of April of last year.

Investors who struggle to find reward to risk setups greater than the preferred target of 3, TWNK provides a ratio in excess of 5.Preferring chocolate and not a fan of the vanilla twinkie middle filling, I will pass on this and wait for a buy(t) of HOHO in case they ever bring it public.