Did you catch this move in Chipotle Mexican Grill (CMG) this morning? We did! (April 26, 2018)CMG FB CMG AMZN FB AMZN
I want to look at Chipotle ( NYSE: CMG ) today and here’s why: This morning I hosted a training session on trading the first hour and we were looking at two stocks. We were looking at Facebook ( NASDAQ: FB ) and Chipotle ( NYSE: CMG ). Facebook ( NASDAQ: FB ) kind of turned out to be a dud; it was fine but Chipotle ( NYSE: CMG ), a much better deal so I thought I would look at this.
First of all, you could see how the stock gapped way up. It was up last night big time, just up really nicely. This morning the stock gaps up, this is on a 5-minute chart. You will notice that the intraperiod lows continued to rise all the way up until the 10:00 hour. And even then, if you really look closely here, you can see that even when we start to get the red bars the intraperiod lows continued to be higher. It was not until here, at almost 10:30, where you actually got a low that was LOWER than the prior period’s lows. So this was a stock that was really under pressure; this turned out to be a really good trade, basically until I shut off, which was about 10:45 or so.
What I wanted just to mention on these trades is, and you could see a similar situation with Amazon ( NASDAQ: AMZN ) tomorrow or not. The most important thing that you want to be looking at is this: You have got to look and see where the stock opened up. And then over the next, again, this is a 5-minute chart, over the next 10-minutes or so you have got to watch and see which way the stock is going. If it is still moving higher then you know that there are enough buyers, enough buying demand, through the opening rotation when the stock first started trading and then everybody got done with their, quick I got to get it, quick I got to sell it, whatever, when they got done with that, then what is happening with the stock? As it continues to move higher the momentum picks up and you are making money on the upside.
You can look at Facebook ( NASDAQ: FB ) and see a much different dynamic. While the stock did move up initially it generally just kind of traded down. We wasted some time looking at this kind of waiting for a big move one way or another. But of course, the nice thing is, “many eyes see a lot of different things.” I had people saying, “Hey Dan, look at Chipotle ( NYSE: CMG ), look at Chipotle ( NYSE: CMG ),” and so that is where we went to.
So tomorrow with Amazon ( NASDAQ: AMZN ), if we look at Amazon ( NASDAQ: AMZN ) here you can see what is happening. Back up above 1600.00, look at this high of 1641.00. The stock really needs to be trading above 1641.00 to make this a viable LONG trade tomorrow. That is pretty important and it is in a different situation than Facebook ( NASDAQ: FB ) was because Facebook ( NASDAQ: FB ) was down so low; you know what all the news was on Facebook ( NASDAQ: FB ). Amazon ( NASDAQ: AMZN ) doesn’t have that problem.
Tweets by POTUS about the Washington Post and Amazon ( NASDAQ: AMZN ) and this and that, that is not the same as Facebook ( NASDAQ: FB ). I don’t care about that you shouldn’t either. What you should care about is that the stock is up above 1600.00. Wait tomorrow for it to be ABOVE it’s post-earnings high here of 1641.00. If it is above that level tomorrow; then you want to start looking to go long. If it is not, well then you know where your ceiling is, don’t you?