How High Can Chipotle Go?

On the surface, a chart of Chipotle shares might seem a little bit too messy to bother with, but in reality I actually think it’s fairly clean. I see clear overhead supply since our initial upside targets were hit at the beginning of the year. The weight of the evidence suggests that we should see a new leg higher soon and from a risk management perspective, our levels are very well-defined. We like that.

The first chart shows us how we arrived here. This overhead supply since the beginning of the year is the 161.8% Fibonacci extension of the correction last Spring and we’ve struggled with this level all year.

7-22-15 cmg d1

This next chart shows us how we can determine our next targets upon completion of this sideways consolidation. The 100 point range gives us a measured move target of $800 and the 161.8% Fibonacci extension of this recent correction also takes us just above $800 so this is our target. Risk management-wise, no reason to be long if prices are below 700 and aggressive longs can add only if we have cleared this resistance from earlier in the year.

7-22-15 cmg d2

Posted to U.S. Averages and Interest … on Jul 22, 2015 — 1:07 PM
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