CMG closes within prior day's range
Chipotle Mexican Grill Inc. (CMG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CMG ended the month 9.77% higher at 1155.16 after gaining $6.76 (0.59%) today, slightly underperforming the S&P 500 (0.77%). Trading up to $25.42 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, CMG actually lost -2.69% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CMG as at Jul 31, 2020):
Friday's trading range has been $27.22 (2.36%), that's slightly below the last trading month's daily average range of $33.02. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CMG. Prices continued to consolidate within a tight trading range between 1110.30 and 1160.62 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading as low as 1127.94 during the day, the market found support at the 20-day moving average at 1132.48.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 1160.62 where further buy stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Chipotle Mexican. Out of 58 times, CMG closed higher 51.72% 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 67.24% with an average market move of 1.09%.