CMG breaks back above 20-day moving average
Chipotle Mexican Grill Inc. (CMG) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CMG finished Thursday at 661.10 edging higher $11.62 (1.79%) on low volume, significantly underperforming the S&P 500 (6.24%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CMG as at Mar 26, 2020):
Thursday's trading range has been $36.50 (5.52%), that's far below the last trading month's daily average range of $57.73. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CMG.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji. The last time a Doji showed up on March 16th, CMG lost -8.24% on the following trading day.
The market managed to close back above the 20-day moving average at 648.21. Prices are trading close to the key technical resistance level at 694.41 (R1).
Although the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 694.41 where further buy stops might get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Chipotle Mexican. Out of 58 times, CMG closed higher 56.90% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.79% with an average market move of 1.37%.