Watch For These Levels as Chipotle Stock Price Retreats From Record Highs

Shares successful accelerated casual concatenation Chipotle Mexican Grill (CMG) dropped much than 5% connected Monday, giving backmost a further information of nan awesome gains nan banal registered aft nan burrito shaper announced a 50-for-1 banal split successful March, arsenic investors proceed to take profits disconnected nan table.

Below, we return a person look astatine nan technicals connected Chipotle’s floor plan while besides identifying important levels to watch retired for amid further stock value weakness.

Chipotle Stock Confirms Bull Trap 

Chipotle shares collapsed retired from a six-week play of consolidation successful mid-June to scope a caller grounds precocious but person promptly reversed little since that clip to corroborate a bull trap, a floor plan shape that "traps" investors who initiated agelong positions connected nan breakout awesome and subsequently generates losses arsenic nan value reverses. 

In different motion of weakening upside momentum, technical divergence appeared connected nan floor plan past period erstwhile nan banal climbed to a caller high, but nan relative spot scale (RSI) made a comparatively little high.

Indeed, nan edifice chain’s shares closed beneath cardinal support astatine $61.50 connected Monday connected above-average volume, raising nan anticipation for further declines successful nan weeks ahead.

Monitor These Chart Levels Amid Further Selling

Amid ongoing weakness successful Chipotle's stock, investors should watch 4 cardinal areas wherever nan shares whitethorn find buying interest.

Firstly, it’s worthy monitoring nan $56 level, an area connected nan floor plan wherever nan value whitethorn brushwood support upon a capable of nan March 19 pre-breakaway gap, nan time earlier nan company's shares jumped much than 3% pursuing nan the banal divided announcement.

Bulls’ nonaccomplishment to clasp this level could spot a little spread filled astatine astir $50, which besides presently sits conscionable beneath nan rising 200-day moving average.

Further downside could spark a diminution to astir $47, a region wherever buyers whitethorn comprehend worth adjacent a December 2023 swing high.

Finally, a much important correction could spot nan shares revisit $43, wherever they would apt pull bargain hunting adjacent a trendline stretching backmost to June past year.

When monitoring nan support levels outlined above, investors should activity confirmation from different technical indicators, specified arsenic an overbought RSI reference aliases a bullish candlestick pattern, that supply further clues nan existent retracement successful nan banal mightiness beryllium coming to an end.

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As of nan day this article was written, nan writer does not ain immoderate of nan supra securities.