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C1MG34 trade ideas

CMG Expectation of Reversion to Mean after Earnings DisappointmeI think CMG has accumulated way too much hype and expectation in the recent run-up, which has caused the stock to rise above a flagging technical indicator. I expect that Earnings coming out Tuesday after market close will either disappoint or will fail to sustain the bull run any further, and that CMG will "revert back to the mean" by forming a significant down-leg returning it to the steady-state zig-zag pattern of matching up-and-down trends.
NYSE:CMGShort
by ambientdrone
IN 2017, SHORT a $400 co. Again, Again and Again. Here's Why:"Chipotle" . Sounds pretty fancy, and that's what they were going for until they served up truckloads of what one should only have to fear when visiting deep in Mexico - and that is the dreaded E. Coli Burrito . When it comes to E. Coli - read and think "human feces". Their training and restaurant standards sucked - AND THEY HAD TWO CEO's, so a lack of definitive decisions and damage controls set the course and made all these situations worse and when the writing was on the wall? THEN one of them bailed... but you gotta understand what has cemented Chipotle's demise because CHEAPOTLE IS A BK. Read the following and you decide - then look at the charts... Hemorrhaging money after the turd burrito incidents which were so widespread they repeatedly made National news. THEY BORROW OVER A BILLION DOLLARS - READY FOR THIS - BUYING THEIR OWN STOCK BACK!! (ALL AT HIGHER LEVELS THAN THE $405 IT'S TRADING AT TODAY). THE MOST RECENT DEAL THEY MADE TO RAISE CASH IS THE LAST SCREW IN THE TOILET SEAT. Their largest shareholder gave them a final $700 million and forced them to use their last assets to secure said loan and stay afloat - as they put up the real estate the stores are sitting on to secure this last, private loan. Sounds like he may come out of this smelling pretty fresh. 1) CMG is still trading over $400 despite repeated downgrades. 2) Even with all the downward direction from the previous quarter, the company disappointed w lousy earnings and more downside surprises last month 3) They are literally keeping this together by talking about how customers are coming around again and they are confident that "new and innovative menu items", and "new server training to improve the customer experience" will take effect soon. Sounds like nothing more than what was in that bad batch of burritos. 4) This company needs a literal miracle to save it -- and when did you last discover a potential BK where the stock was trading at over $400? The catch is this buyback money - because it is being used to prop up the stock in the face of steady selling, and that means you cannot just dump a single commitment into a bunch of put options. You can trade around the isolated buys and they stick out prominently in the charts. I got lucky when it fell over 20 points in a day - so the potential for wicked volatility is amazing and I am hooked trading this stock via puts and calls. RECOMMENDATION -- FOR AGGRESSIVE TRADERS I recommend vertical bear spreads using BOTH puts and calls because of the wild premiums, and the sporadic buys. You can trade these as they come closer to expiration if you are near the money, and use the volatility to unload one leg of your spread if it makes sense at the time. AS YOU APPROACH EARNINGS, CONSIDER STRADDLING - near term. Earnings calls can produce some really crazy moves. The volatility number Marketwatch assigns is a 33. Bottom line? Despite all the buyback talk, the downtrend is intact and short of some unforeseen miracle - I do not see how this company can turn it around and survive. if anybody finds something they think I am missing here - please feel free to share..
NYSE:CMGShort
by trzcb8
Chipotle rejected at 440 level. Will it break to the downside?Technically speaking Last week the stock was rejected again at the 440 level. The 4th time since July. The 440 level seems to be pretty important. The bottom of the tight range since say June is 385ish. A break below that level and the next demand I see on this monthly chart is say 280-240ish. That is a 30%+ slide, seems steep, but who knows. Fundamentals Chipotles troubles have been well documented. Just google Chipotle, e-coli and you should be caught up. The company made news in September when Bill Ackman of Pershing Square acquired a 5% stake. Link: money.cnn.com As I always say, I lean technical, but hey, fundamentals do matter, more so vs expectations, in my opinion. The stock has essentially been cut in half since 2015, so the R/R would seem to favor the long side. Is this a mis-priced bet? Who knows, but that is why we traders take risk. How much are you willing to risk to find out? As noted on the chart, earnings come out on the 25th, so proceed with caution.
NYSE:CMG
by CalebDismuke