4 Trade Ideas for Chipotle: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Chipotle, $CMG, started to move higher off of a December bottom. It stalled in April and consolidated, moving sideways, in an expanding wedge for the next 2 months. It finally broke the wedge to the upside and consolidated in a flat pattern until the end of June when it lifted higher again. The last two weeks have seen it hit resistance and pull back then reverse up to resistance again where it enters the week.

The RSI has continued to hold in the bullish range with the MACD flat but positive. The Bollinger Bands® are shifted to the upside. There is no resistance above 822. Support lower comes at 795 and 780 then 765 and 745 before 725. Short interest is moderate at 5.9%. The company is expected to report earnings next on October 23rd.

The September options chain shows the open interest on the put side spread from 725 up to 810. On the call side it is big at 820 and grows from 835 to a peak at 880. The October options open Monday. The November options, the first to cover the next earnings report, show light activity from 740 to 820 on the put side. On the call side it is biggest at 800 and 900.

Chipotle, Ticker: $CMG

Trade Idea 1: Buy the stock on a move over 822 with a stop at 795.

Trade Idea 2: Buy the stock on a move over 822 and add a September 820/800 Put Spread ($10.00) while selling the November 900 Call ($21.00).

Trade Idea 3: Buy the November 740/820/860 Call Spread Risk Reversal for free.

Trade Idea 4: Buy the September/November 860 Call Calendar (25.80) and sell the September 760 Puts ($8.20).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which as August options expiration comes to a close saw the equity index ETF’s had a wild week finishing slightly lower in consolidation.

Elsewhere look for Gold to continue in its uptrend while Crude Oil consolidates in its downtrend. The US Dollar Index seems content to continue the slow drift higher while US Treasuries are possibly starting to pullback. The Shanghai Composite and Emerging Markets look to continue to the downside.

Volatility looks to remain elevated keeping the bias lower for the equity index ETF’s SPY, IWM and QQQ. They are all showing consolidation in the short run charts with it happening at higher lows for the SPY and QQQ. The IWM remains in a broad consolidation. On the longer charts the back to back indecision candles may have some losing sleep this week end. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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