Key Price Planning Levels Updated for Chipotle CMG

Sep 2, 2015: 1:20 PM CST

After a huge price surge from $600 to $760, Chipotle (CMG) shares retraced to a critical “Make or Break” daily and weekly chart trade planning level.

From there, shares are compressing into a clearly defined support and resistance range.

Let’s update these levels and note the price pathways going forward for this high-flying stock:

A lengthy positive momentum divergence preceded the bullish breakout and immense surge higher in July.

From there, price stalled above the $730 prior high, retracing (reversing) down against $760 per share.

From there, price fell all the way to the critical $690 and $700 per share retracement target.

At this point, we’re closely monitoring the $690 clear support – as drawn – for a possible breakdown bearish reversal or else the $730 key resistance zone for a bullish impulse play back to the $760 highs.

In between these levels, price is “trapped” or compressed between the 20 and 50 day EMAs.

The 20 day EMA overlaps the $721 per share level; the 50 day EMA (blue) trades at $702 per share.

If not already positioned, look for price to move beyond these levels in a breakout or impulsive play.

Here’s the bigger picture of the powerful trend – and key support level – on the Weekly Chart:

Even beyond the impressive $600.00 to $760.00 2015 power-rally, Chipotle (CMG) shares have surged from the 2012 October low near $250 to peak (so far) in 2015 above $750 per share.

If only all stocks could be this bullishly dominant!

For now, we’re focusing on the rising 20 week EMA (green) at $685 which overlaps the $690 level as mentioned above on the Daily Chart.

Final Thoughts and Trades:

Chipotle is deemed bullish above this support level but is trapped between daily support and resistance levels.

A bullish breakout (above $730) suggests shares could quickly rally toward the highs, setting up trades for intraday and swing traders.

However, a “surprise” bearish breakdown under $700 and $690 suggests the opposite – opening shares to the bears to target at least $650 on a sell-swing pathway.

Note these levels and (if applicable with options or shares depending on your risk tolerance with this high priced stock) trade the movements toward or away from these key price levels.

Speaking of options, John Carter released a free video yesterday on how he traded a $150,000 account to $650,000 so far in 2015.

I provided a link to the video below so you can see how he did that and learn from his strategies.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

2 Comments

2 Responses to “Key Price Planning Levels Updated for Chipotle CMG”

  1. Chipotle Shares Retrace Says:

    […] By Corey Rosenbloom […]

  2. Recardo Says:

    It’s likely to head back down due to the support level, but we need to be very tight upon using these, it’s just one mistake which could lead to horrible results. I usually keep strict money management with using S/R method and for me there is a lot of help provided by my broker OctaFX, it’s a very solid company having 50% bonus on deposit which too is use able one, so that makes me feel pretty happy and relax.