timwest

CMG Uptrend Broken

Chipotle Mexican Grill (BATS:CMG)  
timwestmod 26 months ago
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900
CMG has broken below a key level of technical support at 421 where it had spend more than two weeks building a base. The support level broke on heavy volume and this selling zone has been retested on a light volume advance and is close to failing as of this analysis (failure is defined if CMG breaks under a previous day's low). You can see how low CMG would have to go to see another level where it had traded for 13 days. Target 400. Stop loss: 425.

This is a technical-only analysis, but CMG's market cap is a large $13 billion and their earnings are a small $230 million (rounding off). With sales only $2.4 billion, CMG is a whopping 5.8 times trailing revenues. Would you buy the whole company with $13 billion of your cash laying around so you can "earn" less than 2% on your money in a restaurant business? Obviously they have leverage to grow the company and have done so very successfully to date.

Cheers. By: Technical Tim, 3:00PM EST Monday, April 30, 2012
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nmikemod April 30, 2012, 2:23 p.m.
.........agree....https://www.tradingview.com/e/RWBkteOV/
chart traderpro agreed with this chart, May 1, 2012, 3:07 p.m.
Agreed.
timwestmod May 4, 2012, 10:20 a.m.
The path veered a bit by not dropping to 400 first, but did go up to the area that I thought it needed to rally to. Also, CMG didn't hit the stop and is now nicely profitable. Hope you all are doing well too.
chart traderpro May 4, 2012, 12:05 p.m.
Thank you Tim
petervoigt167 agreed with this chart, May 5, 2012, 4:11 p.m.
Agreed.
timwestmod May 8, 2012, 8:42 a.m.
CMG is about to make its first downside target...
chart traderpro July 4, 2012, 6:07 p.m.
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 https://www.tradingview.com/v/HmtAaV1p/ ?

snapshot
StopPrintinMoney agreed with this chart, May 11, 2012, 10:18 a.m.
Agreed.
lercarto agreed with this chart, May 22, 2012, 8:50 a.m.
Agreed.