Tight Range Compression Continues and Breakout Awaits for Chipotle CMG

Sep 30, 2014: 9:36 AM CST

For those awaiting a breakout in Chipotle shares (CMG), the wait may be coming to an end.

Shares currently remain compressed between the 20 and 50 EMAs as traders await a range (and EMA) breakout.

Let’s update our charts and plot the “Breakout Pathways” for trading this stock:

I initially highlighted this “EMA Compression” last week and wanted to provide an update as shares continued the compression.

We’re still awaiting a breakout from this pattern which triggers a bullish breakout above the $665 level (target would extend toward the $700 prior high level) or else a bearish breakdown triggers on a movement down away from the $655 level.

A steep retracement/breakdown lower opens a sell-pathway toward the $600 confluence.

Our intraday chart allows us to zoom-in on the current compression:

Price has formed an intraday (multi-day) Rectangle Range Pattern between the $668 level and $652 support.

Continue watching these levels and the “EMA Compression” boundaries that are squeezing the stock at the moment.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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