Recent headlines concerning an E. coli outbreak combined with a lighter-than-expected earnings report to careen
Chipotle (CMG)
shares from $740 to $600, a decline of nearly 20%. While the stock’s
longer-term fundamentals have some questions, the short-term charts
favor a rally as they have breached dramatically oversold conditions.
Last week, CMG shares touched $600 for the first time since July,
triggering a psychological support level. Our models rank the stock as a
short-term bullish candidate with a short-term price target of $675 as
the overreaction to recent events has opened the doors to bullish
traders.
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