$CMG Long Swing Trade Pros
-Major pullback from highs: -40% from ATH.
-Technical confluence at support: Top of 2020–2024 range, weekly 200MA, and weekly volume POC.
-Gap magnet above: July 22 gap to $50.76 (+21% from here) with intermediate target $45–47 (+8–9%).
-Strong fundamentals: YOY revenue and gross profit growth consistently +20–30%.
-Brand moat: Loyal customer base, pricing power, consistent product quality.
-Innovation: Ongoing AI & robotics investment in meal prep. Supports margin expansion over time.
-Post-split price appeal: Lower nominal price post 50:1 split may draw in retail on recovery.
Risks
-Valuation still stretched: P/E of 38 even after a large correction. Leaves room for further multiple compression.
-Macro headwinds: If consumer spending slows, fast-casual dining could see softer traffic.
-Gap risk to the downside: A decisive break below $40 could trigger selling toward $35–37.
-High expectations baked in: Growth slowdown could cause outsized downside.
Entry Zone: Current levels ($43–44)
Targets:
-TP1 (Conservative): $46–47 → +8–9%
-TP2 (Aggressive): $50–51 → +18–21% (gap-fill / daily POC target)
Stop Loss:
-$41–40 → Below key support confluence (old range top, weekly 200MA).
-Close below $40 = setup invalidated.
Timeframe:
-Swing trade → Expectation of move playing out over several weeks to a few months.
Notes:
-Trim partial position at TP1 to lock gains, let rest ride toward TP2.
-If price fails to reclaim $44 within the next few sessions, reassess — could indicate sellers still in control.
-P/E still high. Not a value play.
