$CAVA Group Inc.(CAVA)$ is trading at an almost ludicrous P/E ratio of over 600. Each CAVA store is valued at over 45 million - that's crazy! However, why does it continue to remain at overextended levels?

Because it is the most overbought it has been in its history as a publicly traded company. In one of my previous posts, I mentioned that overbought stocks can remain overbought for long periods of time. CAVA is no exception to the norm.

I will be doing a deeper dive into the stock in the distant future. However, do consider that it is now trading at the upper end of its ascending channel, and is not a stock I would like to chase.

However, is it a stock that I will like to short? No, because it has not shown any longer term signs of topping. Any pullback is likely to be bought up until we either form a bearish divergence or form an "M" pattern with either equal highs or a blow off top. Until then, we can't even expect something as significant as a mean reversion back to the middle trendline of the channel.

In short, I suggest not chasing or shorting this stock until you see signs of topping. Save your capital and look for other long/short opportunities elsewhere. 

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