Trading Updates on Chipotle CMG Feb 23

Feb 23, 2016: 2:27 PM CST

What’s Chipotle (CMG) shares up to now? What opportunities exist to trade them?

Let’s start with the Daily Chart, note the key levels, and plan from there:

The E.coli scare sent investors fleeing the stock, resulting in a collapse from $750 to $400 per share.

It’s possible if not likely that Chipotle (CMG) shares bottomed (reversed) off the $400 level and are in rally/reversal mode into early 2016.

Price reversed strongly up over 25% from the early January low, targeting the underside of the 38.2% Fibonacci Retracement level (highlighted).

For trading tactics right now, shares are “breakout bullish” on an eventual trigger breakout above $535; are Neutral (unbiased) within the $500 to $535 per share highlighted range; and breakdown bearish under the $500.00 per share price and EMA support line.

Here’s the large perspective pulled back to the Weekly Chart of the reversal(s):

Chipotle was a darling stock for many months and even years, ending the uptrend glory with the bearish reversal at the $75.00 per share peak mid-2015.

From there, the share price collapsed, losing half its value into the early 2016 low.

Just like the Daily Chart, the Weekly Chart ALSO shows a Neutral Range Compression Zone at the same levels:  $500.00 for support and $535 for resistance.

There’s no main trade here until price breaks through one of these barrier (pivot) levels.

Under $500, look to trade for a retest of the $400 low; on a breakout look to play bullishly toward $575.

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Corey Rosenbloom, CMT
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