Wash, Rinse, Repeat: Another divergent high, another likely trend reversal coming soon. CMG (Chipotle Mexican Grill) will trigger an objective short entry on a solid break below the 2017.89ish support.
CMG daily July 25th
As an alternative, albeit much more aggressive earnings play, another option would be to take a partial/starter position here, adding after Chipotle reports earnings after the market closes tomorrow, adding on either a post-market (or Thursday’s regular session) pop with a relatively tight stop just above the HOD at that time, or wait until the 2018ish support level is taken out. Daily chart above.
I’ve also started going through the charts of the individual restaurant stocks & will most likely be adding additional trade ideas in the sector with stocks such as DRI, MCD, etc.. As such, for those that considering a short on the restaurant sector (other than the thinly traded EATZ ETF), make sure to adjust the position size on any individual restaurant stocks to allow room for an ultimate total net desired exposure (as a percentage of your overall portfolio) to the sector. At this time, I would only consider a mild exposure, if any, to the sector as most of the restaurant stocks, such as CMG, as still solidly entrenched in uptrends without any sell signals or decent signs of a reversal, as of now.