Failed Reversal Takes us to New Lows for Chipotle CMG
Mon, Oct 30, 2:21 PM ET, by Corey Rosenbloom
Almost but not quite!
Chipotle (CMG) shares plunged to new lows today after failing to break resistance into a bullish breakout from support.
What’s the level and what’s the play from here?
After another lengthy sell-off in shares, price (buyers) found support at the $300 level recently.
Positive divergences set the stage for a possible bullish reversal off this support level, and thus some traders logically bought into this key pivot.
Price did push up $35 higher toward the target of the falling 50 day EMA (blue) but buyers weren’t strong enough to generate a breakout and thus a bullish trend reversal.
The next move was yet another gap lower, shattering support as a new liquidation phase continued.
Chipotle (CMG) reminds us that trends tend to continue and surprises – via failed reversals – often come IN the direction of a prevailing price trend.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”
SDI Glossary: "price" Definition
SDI Glossary: "Finance" Definition
SDI Glossary: "Stock" Definition
SDI Glossary: "Trend" Definition
This Article's Word Cloud:
More articles: 1 2 3 4 5 6 7 next »