Blog

Watch For These Levels as Chipotle Stock Price Retreats From Record Highs

Jul 9, 2024 | blog

Shares Dropped More Than 5% on Monday

Source: TradingView.com

Source: TradingView.com

Key Takeaways

  • Chipotle Mexican Grill shares dropped greater than 5% on Monday as pleasure over the fast-casual chain’s current 50-for-1 inventory cut up wanes.

  • Chipotle shares have confirmed a bull entice, a chart sample that “traps” buyers who initiated lengthy positions on the breakout sign and subsequently generates losses as the value reverses.

  • The Chipotle share worth might discover help at key chart ranges together with $56, $50, $47, and $43.

  • When monitoring the help ranges outlined above, buyers ought to search affirmation from different technical indicators that present extra clues the present retracement within the inventory is perhaps coming to an finish.

Shares in quick informal chain Chipotle Mexican Grill (CMG) dropped greater than 5% on Monday, giving again an additional portion of the spectacular features the inventory registered after the burrito maker introduced a 50-for-1 inventory cut up in March, as buyers proceed to take earnings off the desk.

Below, we take a more in-depth take a look at the technicals on Chipotle’s chart whereas additionally figuring out necessary ranges to be careful for amid additional share worth weak point.

Chipotle Stock Confirms Bull Trap

Chipotle shares broke out from a six-week interval of consolidation in mid-June to succeed in a brand new document excessive however have promptly reversed decrease since that point to substantiate a bull entice, a chart sample that “traps” buyers who initiated lengthy positions on the breakout sign and subsequently generates losses as the value reverses.

In one other signal of weakening upside momentum, technical divergence appeared on the chart final month when the inventory climbed to a brand new excessive, however the relative power index (RSI) made a relatively decrease excessive.

Indeed, the restaurant chain’s shares closed under key help at $61.50 on Monday on above-average quantity, elevating the chance for additional declines within the weeks forward.

Monitor These Chart Levels Amid Further Selling

Amid ongoing weak point in Chipotle’s inventory, buyers ought to watch 4 key areas the place the shares might discover shopping for curiosity.

Firstly, it’s price monitoring the $56 degree, an space on the chart the place the value might encounter help upon a fill of the March 19 pre-breakaway hole, the day earlier than the corporate’s shares jumped greater than 3% following the the inventory cut up announcement.

Bulls’ failure to carry this degree might see a decrease hole stuffed at round $50, which additionally at present sits just under the rising 200-day shifting common.

Further draw back might spark a decline to round $47, a area the place consumers might understand worth close to a December 2023 swing excessive.

Finally, a extra important correction might see the shares revisit $43, the place they might doubtless entice cut price searching close to a trendline stretching again to June final 12 months.

When monitoring the help ranges outlined above, buyers ought to search affirmation from different technical indicators, equivalent to an overbought RSI studying or a bullish candlestick sample, that present extra clues the present retracement within the inventory is perhaps coming to an finish.

The feedback, opinions, and analyses expressed on Investopedia are for informational functions solely. Read our guarantee and legal responsibility disclaimer for more information.

As of the date this text was written, the creator doesn’t personal any of the above securities.

Read the unique article on Investopedia.

MoneyMaker FX EA Trading Robot

powered by qhost365.com

Finance.yahoo.com