CMG broke below a long term trend line back in April and it has returned back to the trend which now acts resistance. A bearish head and shoulders pattern could also be forming. CMG reports after the close today. Same stores growth has been decelerating and food prices were higher during the quarter. I see CMG falling after earnings to the nearest support line at $600.
Disclosure: Long put spread.
Comments
Vince
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I would not bet against CMG most of the time, they have strong power and expansion. Carnitas are back...they are still the best in fast food "healthy" in my take. Did you take a put spread prior to earnings?
Mimo2
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Yes, I had a put spread into earnings. Technical setup seemed good for a bearish bet, but turns out the street wasn't concerned about the slower same store sales and I may have underestimated the carnitas.
Vince
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One thing I learned there are certain companies I don't be against...when you have great leaders they can blow your account. CMG is such a great stock I would not be against them even if they may go down, I would rathe bet against crappy stocks that will go down...just a timing issue and my thoughts :)