$CMG Post Stock Split: 4 Support Levels.
In this year of forward stock splits, the lesson learnt so far is, not all stock splits are equal.
Case in point:
On 10 Jun 2024, Nvidia closed at $1,217.90 per share before split.
Thereafter it was trading within range based off PCE inflation data and Jobs data.
One month on, things are looking up for Nvidia again.
As of 9 Jul 2024, its share price closed at $131.28; up +7.79% from post-split price.
Chipotle - So far.
Unfortunately, the same could not be said for $Chipotle Mexican Grill(CMG)$ yet.
Shares in fast casual chain CMG: (see above)
Dropped > -5% on Mon (08 Jul).
Dropped -3.41% on Tue (09 Jul).
Rose +1.43% on Wed (10 Jul).
Overall still down by -6.98% after 3 trading days.
CMG effectively, gave back a further portion of its impressive gains chalked up, after it announced a 50-for-1 stock split in March 2024, as investors continue to take profits off the table.
Amidst weak sentiments, let’s take a closer look at Chipotle chart’s technicals and identify the possible important levels to monitor.
Bull Trap ?
Chipotle stock was trading sideways for 6 weeks in June, then surged to an all-time high.
However, it quickly dropped back down, confirming a "bull trap" — tricking investors into buying before a fall.
In another sign of weakening upside momentum:
Technical divergence appeared on the chart last month when the stock climbed to a new high.
But its relative strength index (RSI) made a comparatively lower high.
On Mon, 08 Jul 2024, CMG’s shares closed below its key support $61.50 per share, on above-average volume, raising the possibility for further declines in the weeks ahead.
Support Levels Amid Sell Down?
CMG - 4 different support levels
Amid ongoing weakness in Chipotle's stock, investors should watch 4 key areas where the shares may find buying interest.
(1) Support Level - $56.
Keep an eye on $56. (see above) The stock price might bounce there if it falls again.
This is because it's where a price gap from 19 Mar 2024 exists (before the stock price jumped).
After Wed, 11 Jul 2024 trading, there is evidence that there are investors holding the fort at this support level, coupled with overall market sentiments (of course!).
(2) Support Level - $50.
If the bulls’ failed to hold the $56 support level could see a lower gap filled at around $50 (see above), which also currently sits just below the rising 200-day moving average.
(3) Support Level - $47.
Further downside could spark a decline to around $47 (see above). This is a region where buyers may perceive value near a December 2023 swing high.
(4) Support Level - $43.
Finally, a more significant correction could see CMG revisit $43 (see above), where they would likely attract bargain hunting near a trendline stretching back to June 2023.
Other Verification Tools.
When monitoring the support levels outlined above, all investors should seek confirmation from other technical indicators.
For example:
Relative strength index (RSI). When a stock’s RSI is “70 & above” - it will be regarded as “Overbought”.
A bullish candlestick pattern, that provide additional clues the current retracement in the stock might be coming to an end.
What’s Next ?
On Thu, 04 Jul 2024 I have posted about Chipotle:
Its vantage points.
Its outlook.
Whether it is time to buy or sell.
Click here ! to read about it (and give a like!)
Things are still evolving at Chipotle. (see below)
On 10 Jul 2024, Chipotle announced that its CFO Jack Hartung would be retiring on 31 Mar 2025, following his 25-year tenure.
He has played a crucial role, guiding Chipotle through challenges such as McDonald’s divestiture and a major contamination crisis.
More importantly, under his financial leadership, Chipotle has evolved to become the largest US fast-casual chain by sales.
If history is anything to go by, Chipotle a pedigree stock (like Nvidia) will recover. Still holding out for a more attractive price before taking the plunge.
Must Read: Click on below titles to access. Give a like & help to repost ok. Thanks.
Do you think Chipotle is a good stock to have in one’s portfolio ?
Do you think it will be a challenging time ahead for Chipotle, with veteran CFO retirement in 6 months’ time ?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
with the mas down a chunk today on semi- positive inflationary rate news,
also jumping into broadcom split...avgo
CMG 60+ by EOW!🚀
Pls help to "Re-post". Tks! Rating is important (to me).
Would you consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!