Chipotle has been making a series of lower highs since the $45+ region, with a clear descending trendline acting as dynamic resistance on the daily timeframe. The recent relief rally from the $30 area appears to be losing momentum as price approaches confluent resistance.
Key observations:
The current bar structure is printing 2-Down (Short) with a Ready Down signal, suggesting sellers are stepping back in after the bounce. Price is sitting at approximately $36.30, caught between an ascending support trendline from the lows and the descending resistance from the highs — a compression pattern that typically resolves with a directional break.
The broader trend remains bearish with a score reflecting sell-side pressure. What's notable is the confluence of filters aligning on the bearish side, including momentum and mean reversion — which adds weight to the directional bias when they agree.
Levels I'm watching:
38.71 area — invalidation zone above recent structure; a reclaim here would shift the thesis
36.66 — near-term support that needs to break for continuation
34.59 — measured target based on the current range structure
Upper resistance ~45 — descending trendline origin and prior breakdown level
Scenario A — Bearish continuation: If the ascending trendline support around $36 fails to hold, the next leg down likely targets the mid-$34 area. Volume confirmation on the breakdown would add conviction.
Scenario B — Relief rally first: Price could squeeze toward the $38–39 zone before rolling over, which would actually provide a higher-probability entry for those watching for shorts at better risk/reward.
Scenario C — Invalidation: A daily close above $38.71 with momentum flipping would negate the bearish structure and suggest the relief rally has more legs.
Worth watching how this compression resolves over the coming sessions.
This post reflects our personal analysis for educational purposes only and is not financial advice. Always do your own due diligence and manage risk accordingly.
Key observations:
The current bar structure is printing 2-Down (Short) with a Ready Down signal, suggesting sellers are stepping back in after the bounce. Price is sitting at approximately $36.30, caught between an ascending support trendline from the lows and the descending resistance from the highs — a compression pattern that typically resolves with a directional break.
The broader trend remains bearish with a score reflecting sell-side pressure. What's notable is the confluence of filters aligning on the bearish side, including momentum and mean reversion — which adds weight to the directional bias when they agree.
Levels I'm watching:
38.71 area — invalidation zone above recent structure; a reclaim here would shift the thesis
36.66 — near-term support that needs to break for continuation
34.59 — measured target based on the current range structure
Upper resistance ~45 — descending trendline origin and prior breakdown level
Scenario A — Bearish continuation: If the ascending trendline support around $36 fails to hold, the next leg down likely targets the mid-$34 area. Volume confirmation on the breakdown would add conviction.
Scenario B — Relief rally first: Price could squeeze toward the $38–39 zone before rolling over, which would actually provide a higher-probability entry for those watching for shorts at better risk/reward.
Scenario C — Invalidation: A daily close above $38.71 with momentum flipping would negate the bearish structure and suggest the relief rally has more legs.
Worth watching how this compression resolves over the coming sessions.
This post reflects our personal analysis for educational purposes only and is not financial advice. Always do your own due diligence and manage risk accordingly.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
To claim access (including a free 7 day trial), go here: 👉 tradingdecisionslab.com/
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.