timwest

CMG short sale setting up

BATS:CMG   CHIPOTLE MEXICAN GRILL INC
954 22 3
I believe this is just a rally back into resistance here on May 22, 2012 at 404.48 +11.15 or 2.83%.

I will wait until tomorrow to short and I will look for a 410-415 IDEAL ENTRY LEVEL and will look for a 384-380 target.
My stop will be 425-430.

Just giving a heads up early.

Cheers.
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Well, it looks like CMG rejected that 12-days of supply resistance level very easily and closed down on the day today.
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Hi Tim, I took a trade on this stock last time you mentioned it. I wanted to say thanks because I made a nice profit on it. However, it was a hard trade to make due to the volatility. With some of your picks (including this one) I wait for above normal volume in the morning, and the price moving in the direction I want to trade in as a confirmation. I just thought I'd share because I like your picks a lot, but they are generally too long a time frame for how I trade, so this helps cut the meat out of the trade. Keep up the good work, many of us are lurking and enjoying your posts!
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rockstar rockstar
For clarification, here is how I drew my chart last time you alerted me to this stock. You can see my targets were close, but not %100. I shorted 5/3 in the morning based on what looked like strong volume at the time. Turned out to be not much more than the previous day, but still a bit stronger.

CMG short set up
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timwest PRO rockstar
I appreciate your comments and I'm glad I can help you filter out some great trading setups. It is definitely important to know yourself and how much risk you can handle, and what time frame you prefer to trade on. Feel free to post your comments on any trade, especially when to add to a position, or when to take some off. I think the best thing we can all do for each other here is to point out when a trade is working and when it looks like it isn't. When a trade is working, then we can add position size and move the stop closer to allow for a trade to turn into a very big winner. I'll take a look at your work and thanks again for your kind comments. We are all one big team working together to make a living in the markets. Happy to have you on my team.
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I shorted CMG below the "ideal" entry window that I highlighted. The rally could have made it up to that level, but I will view the inability to get up to resistance as a sign of weakness in the same way as you would judge a fighter who gets knocked down who then is slow to stand back up. If the seller is really still there (the other boxer) with more shares to unload then this is the time to knock-out CMG. So, lower the stop to the 415 area (down from 420-425) and I will watch closely.
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CMG did open very close to the 410 level this morning. CMG has averaged 10 points a day in trading range or 2.5%, so it is a volatile stock. Clearly though, you can see that there was a seller from 430-420, then from 425-410... so we can "lean against" that seller by trying to sell close to the level where they are to minimize our risk. I assume they will still be there trying to sell off stock at levels that they likely deem to be overvalued. Remember that 20% moves (relative to the market) in stocks can create overweightings in mutual funds. For example - most stocks have to be no more than 5% in a mutual fund, but there are thresholds that they allow the position to grow to. In this example, a 20% relative rally would put the shares up to a 6% position (5 increased by 20% makes 6). And the mutual fund would then need to sell of 17% of the position to get it back to 5% of the fund.
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Hi Tim, thanks for the charts. I especially like your time based analysis, it just makes sense.I find most of my trading buddies are focused too much on horizontal levels or patterns ONLY....can you recommend a book about TA that really has something unique ?
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Hi wpd, I didn't notice this question from you until now. I consider myself a market profile expert, which was a method invented for intraday analysis of 15 minute time periods through a day. What I did was plot daily ranges and have learned all kinds of time-based and price-based rules from 24 years of hand-plotting daily range charts. The concepts also apply to weekly, monthly and yearly charts. So, for starters, I would suggest any book on market profile, but also I'd suggest hand plotting a major market move in any market using the market profile charting method and then you will see patterns that you had never seen before. Again, sorry for the slow reply. I really had not seen your question.
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Here we are in the "entry" box... Rally in CMG is right into the "aggressive sellers" red circles I have noted on the chart.
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I'm covering right now (382.73). This has taken much more time than thought originally, but the stop never hit and it has been a good hedge for my portfolio to boot.
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dimes timwest
I agree. When trades take to much time to materialize(at least for me)your time/ /effort can be used to focus on other possible trades. And tied up capital can be another issue. That was a short coming of mine when I started trading, I would never cut the trade short of my projected target. I think it had to do with focus on being right more than cutting a trade for a profit. Ego can play a big part in draining a traders bank account, the thing I noticed as I move forward and meet more experienced traders is they care more about there account and care less on being right. Just A thought.
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If I had found other trades that I liked more then I would have focused my energy in other places. It was a great trade overall and I nailed the entry level to a tee and there were many wide swings back and forth to trade in an out of the position, which is ideal for me. Overall, your thoughts provide a mixed picture. If you cut all of your trades short of their projected targets, then your winners wont cover your losers over time. Instead of getting philosophical here, the important thing is to know your own shortcomings so they don't interfere with logical decision making. What is right for you is right for you. There is not one universal way to trade properly. Some people are wrong 90% of the time and make money and some people are right 90% of the time and lose money. Just know what you are doing and why and learn how to survive through the lean periods where there are no profits. To summarize: We can all help each other at this site by allowing ourselves to share our thinking, which will allow us to follow our own trades with conviction. Cheers dimes.
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dimes timwest
While writing the comment I kind of had a feeling I was coming across that way...You are correct that does sound like I am saying I cut all my trades short and it does sound like a bit of a contradiction. Let me clarify a little, I have cut trades a few times when I have been pretty certain the target was not going to be met, or the trade took a while to materialize and the action did not go as plan. I trade intermarket Analysis first, then pattern recognition along with fib.clusters and projections for entry and exits. I use Elliott Wave for objective stops. Some times the trade does not go exactly according to plan and if I can use intermarket analysis to to help close a trade a little earlier than a stop then I will do that. So maybe in short I was not completely
correct on trend but I always make sure I have a shorter term target that I take profits on and a longer one where I do cut short at times. The spy trade I had going I booked partial profits and the longer target was closed today before it hit my stop because I saw currency markets turning up and spy hitting fib zone where it bounced arond and then started to turn up.I explained it before it happened and charted it and said what I was looking for. But in short I was wrong and made sure I cut it early enough.Most of the time it does not come back and bite me but I consider everything first,what is oil telling me,currencies,S&P, Sometime my trades last for weeks. I am still learning thanks for the advice and you are absolutely right about knowing what I am doing, Money Management is the most important thing in my point of view. I read your comments and really pay attention and I am already looking for my first market profile reading. I hope I did not confuse.Thanks for your time.
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CMG big gap down today. I have been watching the rally in commodities and wondered when it would hit these stocks. Imagine the cereal manufacturers: They too will have cost problems in the near term.
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Good trade Tim. Unfortunately i did not follow it....
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timwest PRO charttrader
Thanks chart trader. And thanks Tradingview for providing such a nice, easy to use, friendly site where traders can share ideas and opinions.
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Tim, could you please provide your opinion/post an update on CMG at this moment? Do you agree with long term shorting opportunities published by nmike
CHIPOTLE MEXICAN GRILL monthly
?
snapshot
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