Chipotle CMG Continues Downtrend to New Lows

Jun 9, 2016: 3:07 PM CST

What a difference a year makes!

Chipotle’s (CMG) share price hovered under $800 per share as late as October 2015 but collapsed all the way toward $400 by January 2016.

Price broke to a new swing low today, continuing the downtrend and challenging the prior spike-reversal low.

On the Daily Chart, we see the downtrend interrupted by a spike-reversal in early 2016.

Price fell shy of $550.00 per share and continued trading lower toward the current $415 level.

A further dip beneath the April low suggests price could quickly challenge the $400.00 per share pivot.

If sellers force share prices under $400.00, then we’re likely to see a continuation lower.

For now, use $400 and $410 as your critical “make or break” reversal (or trend continuation) levels.

Here’s the Weekly Chart that reveals the whole picture:

Price fell from the $760 level toward $400 as stories of product contamination and jeopardized supply-chains racked the company.

A quick “Dead Cat Bounce” occurred in early 2016 which was erased almost entirely into June.

One of our core foundations of trading states “Trends, once established, have greater odds of continuing than of reversing.”

Though it appeared share prices had found a bottom, ultimately the downtrend in motion appears to have been more powerful than the eager buyers (bulls) for Chipotle.

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Corey Rosenbloom, CMT
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