Spiking Corn prices, a weak technical construct, and poor earnings proved to be a powerful bearish formula for Chipotle (CMG) stock. The gap lower following Chipotle’s recent earnings report brought a lot of momentum with it. The sheer power of the drop has pushed the stock just below the .382 fibonacci retracement level and into a long term fan support angle.
As well, Chipotle recorded a “perfected” daily DeMark buy setup today. I am looking to buy Chipotle on any weakness tomorrow for a 1-4 day trade on an expected setup reaction higher (reminder DeMark setups typically produce a reaction over 1-4 bars). Read more: “Understanding DeMark Setups”
This is a very short term trade idea. Trade safe, always define your risk. (Update: I went long CMG Thursday morning) (Update 2: I sold my CMG position on Friday)
Chipotle stock charts with price support and resistance levels. CMG stock charts with technical analysis as of August 1, 2012. Chipotle Mexican Grill stock ticker CMG.
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