A Pullback in the King of Burritos (Professional Opinion)

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 chart

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!

Trade Smart,

Michael Saul
Analyst, Chart of the Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.