On Friday, we put the SPY on the wait-and-see list as there was no buy setup.
For today’s chart of the day, we’re going to look at Chipotle Mexican Grill, Inc. (CMG).
CMG is a casual fast food restaurant specializing in tacos and burritos. It’s headquartered in Newport Beach, CA.
I consider myself a professional at burrito-eating. And in my professional opinion, CMG is the king of chain restaurant burritos.
Pro tip: There’s a secret menu item at Chipotle known as the “quesarito.” They make a burrito using a quesadilla as the wrap and it’s so ridiculous. If you haven’t had one, I truly believe you have not lived your fullest life!
CMG has been on a steady climb higher (similar to what your cholesterol levels will experience if you eat too many of those aforementioned quesaritos).
But as we’ve seen with quite a few stocks lately, CMG appeared to get ahead of itself, signaling it was overbought when it spiked outside its upper Keltner Channel. Profit taking subsequently started to come in.
Let’s see where we are with CMG on the daily chart below:
CMG is heading to the midline of its Keltner Channel, and when it returns there, we can start watching for a buy signal.
Now here’s the thing…
CMG is a high-priced stock, which means it may not be suitable for smaller accounts. That’s why using options (the right way) can help level the playing field.
See ya tomorrow!
Analyst, Chart of the Day