Chipotle rejected at 440 level. Will it break to the downside?
Updated
Technically speaking
Last week the stock was rejected again at the 440 level. The 4th time since July. The 440 level seems to be pretty important.
The bottom of the tight range since say June is 385ish. A break below that level and the next demand I see on this monthly chart is say 280-240ish. That is a 30%+ slide, seems steep, but who knows.
Fundamentals
Chipotles troubles have been well documented. Just google Chipotle, e-coli and you should be caught up. The company made news in September when Bill Ackman of Pershing Square acquired a 5% stake. Link: money.cnn.com/2016/09/06/investing/chipotle-bill-ackman/
As I always say, I lean technical, but hey, fundamentals do matter, more so vs expectations, in my opinion. The stock has essentially been cut in half since 2015, so the R/R would seem to favor the long side. Is this a mis-priced bet? Who knows, but that is why we traders take risk. How much are you willing to risk to find out?
As noted on the chart, earnings come out on the 25th, so proceed with caution.
Last week the stock was rejected again at the 440 level. The 4th time since July. The 440 level seems to be pretty important.
The bottom of the tight range since say June is 385ish. A break below that level and the next demand I see on this monthly chart is say 280-240ish. That is a 30%+ slide, seems steep, but who knows.
Fundamentals
Chipotles troubles have been well documented. Just google Chipotle, e-coli and you should be caught up. The company made news in September when Bill Ackman of Pershing Square acquired a 5% stake. Link: money.cnn.com/2016/09/06/investing/chipotle-bill-ackman/
As I always say, I lean technical, but hey, fundamentals do matter, more so vs expectations, in my opinion. The stock has essentially been cut in half since 2015, so the R/R would seem to favor the long side. Is this a mis-priced bet? Who knows, but that is why we traders take risk. How much are you willing to risk to find out?
As noted on the chart, earnings come out on the 25th, so proceed with caution.
Note
I don't like the R/R for a long or short position at these levels.The longer it stays below $440, a slide toward $240 seems likely.
Note
forgot the chart:(
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