The trials and tribulations of Chipotle Mexican Grill were well documented in the news this winter. The E. Coli scare really put a shiner on the stock – it dropped well over 40% from all-time highs. The days of robust growth are over for now, and while management claims to have some of the most stringent food service standards in the industry, there are still worries about food safety. The company has worked hard to bring customers back in with coupons, and it looks like their efforts may be working.

The chart shows some more upside coming. We had suggested avoiding or selling the stock until Chipotle could create a good bottom and begin to move upward. The recent gap in the chart follows a weak earnings report, but now it is above the bottom and ahead of the key 20 ma for the first time in two months. The MACD is on a new buy signal, which should be confirmed this week.

Relative strength is impressive, as was the move on Monday over the downtrend line. Plenty of resistance lies ahead, but first things first. We could see this get up to the 475 and then 500 area over the coming weeks.

https://www.youtube.com/watch?v=h4oo8oqTfHc

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