I wrote a blog piece on October 13th about Chipotle Mexican Grill Restaurants (CMG) (click here). I wrote it back then because the daily ATR resistance level had been broken and therefore I was wondering whether or not the stock was complete in terms of its downward pain. I stated that despite the improvement in the look of the daily/195-min charts, I was going to hold off looking at taking any positional/swing trades in CMG until at least after CMG was able to take-out the relative strength indicator’s prior pivot high on the 195-min chart. It never got that far, before the earnings report took out the legs from underneath the stock price today.
My title reference of “the Mexican Two-Step” back on Oct 13th refers to the common occurrence that Canadians experience when down in Mexico during the winter months … bugs/viruses in the water/food/drinks often show up in the need to spend significant time on the toilet. Well, it looks like the holders of CMG going into the earnings report didn’t quite make it back to the toilet in time to avoid an accident!
I thought it would be useful to put up the longer-term charts, to show traders once again why I think you need to have the longer-term frame charts in sync with your intended trade if you expect to swing trade any stock nowadays. Ignoring the bigger time can cause serious pain at times … Continue reading