Chipotle Stock CMG-NYSE

08/01/15 – Finally this trade on the Chipotle Stock has stopped out giving a 1% loss on my trading account balance.  The trade really never got off the ground after trigger really, but I stayed the course as these Trend reversal trades can just pop – this one didn’t!  I was able to get 2 Scalp trades in during this time to give a NET profit for this Chipotle Stock of 1.6% on my trading account balance, so not lost anything except for time.  Chart as Below

CMG#5

02/12/14 – Another attempt at a Short Scalp trade on this Chipotle Stock.  Today’s session started with a Bullish move against the main direction of my Main trade but was setting up for a Wave 4 pull back on the 5 minute time frame from which I conduct all my Scalping trades.  At 10:10 am a Bearish Doji Star Double Candlestick Pattern formed with the Doji indicating exhaustion for the Bullish movement at the Fibonacci 0.5 retracement level taken between Wave 2 and Wave 3 on this 5 minute chart. Further evidence for a strong return to the Overall Bearish trend was the Stochastic crossing over in the Over Bought Zone against a False bar Stochastic (Yellow horizontal line) on the bottom of the Stochastic Study.  With this in mind I decided to enter the trade just below the Fibonacci 0.25 retracement @661.83 with the Stop Loss just above the Wave 4 extreme @ 664.83.  As this was a very strong setup I decided to try and take a larger profit so set my Take Profit Limit order @ 655.79, giving a potential 2% profit inline with my efforts to increase the average win percentage of my trades.  My trade triggered at 10:20 am and made reasonable progress. At 10:50 am I placed a trailing Stop @ 658.81 as the price gapped down into this candle and I just wanted to ensure I was locking in profit during this high momentum Bearish move.  After a Wave 5 low was formed the price came back up and took out my trailing stop at 11:15 am giving me a 1% profit on my trading account balance.  Although this wasn’t the outcome I was planning it is still profit and i will still continue to try and achieve out more profit on strong scalp setups on more mature main trades.  Chart as below for this Scalp on the Chipotle Stock.

cmg sCALP#2

29/11/14 – Successful Short Scalp trade on a 5 minute time frame for this Chipotle Stock during Friday’s half day session.  After a strong Bullish move from the open of the session a  very strong Bearish Harami Cross, Double Candle Pattern was formed at  10:25 am EST.  This with a confirmation of the MACD just about to cross from +ve to -ve was enough for me to setup a quick Short Scalp.  Entry was at 669.56 which was below the low of the green bar forming the first half of the Bearish Harami Cross, with the Stop Loss just above the Doji forming the second half @ 672.09.  The standard Risk to Reward of 1:1.6 put the Take Profit Limit Order @ 665.46.  At 10:35 the trade was entered and then in less than an hour at 11:25 am the Take profit Limit Order was taken out giving a 1.6% profit on my trading account balance.  This now makes the overall trade Risk free and if the need arises to time stop this trade in the future there will be a small profit, although the trend line support seems to be holding at the moment.  I will try for another Scalp in the coming weeks if a strong setup arises again. Chart as Below for this Scalp on the Chipotle Stock.

chipotle stock

16/11/14 – Since this Short trade on the Chipotle Stock triggered, the price has pulled back over the last three bars (weeks) so I have have had another look at the recent price action and made a few observations so I understand in my own mind why I am still staying in the trade.  The charts below chart image below shows both the Weekly chart on the left to which I am trading and the Daily chart to the right.   On the Weekly chart I have drawn in a Trend Line Resistance level taken from the Wave 5 High and that touches the highs of two further weekly bars before touching last weeks close. My view is that Two points make a line, but three points make the start of a Trend line (support/resistance) and then further points strengthen that Trend Line.  It is also worth noting that the previous trigger bar did in fact break the previous Wave 3 level but then found support at the Fibonacci 0.382 level taken between the Wave 4 and Wave 5 extremes, which can be seen on the daily chart as an ABC correction, which is sometimes normal after a new all time high has been formed for a stock. Obviously the Trend Line Resistance still holds for the Daily chart but I have gone down to this time frame to understand more the price action on Daily trading sessions.  I can see that last Friday’s bar did form a Doji at the Trend line resistance and the stochastic crossed in the over bought zone.  These factors along with a lower traded volume during Friday’s session could indicate exhaustion in this Bullish movement and a return to the downside next week could happen.  Although my software is labeling this current high as a Wave 3  it could be short lived and become another correction phase if the pending Bearish movement goes back towards the entry point. Another overriding factor in my decision to stay in this trade is that I am not near a time stop window and I always enter a trade prepared to risk 1% of my trading account balance should it go against me.  When I make decisions on entry strategies and stop loss placements I look carefully at support and resistance levels which are logical and sensible so to get out early because the price action is going back towards the previous support level/high is counter productive to my whole sausage machine strategy.  I have had trades that have returned to test these levels and then gone on to make profits and I have have had trades that have stopped out and as I don’t have a crystal ball I have to be disciplined and stay strong to my strategy that gives me great returns year on year. Charts as Below for my observations on this Chipotle Stock.

GMG compare

21/10/14 – The Stop Sell order for this Short trade on the Chipotle Stock has triggered today with large volume and in fact the volume for the weekly chart is close to the high of  last week already on Tuesday! A good sign to this Bearish run is the increase in Volume for each of the past three weeks. As with all Trend Reversal trades, I am only interested in this first move towards the original Wave 4 pivot initially and will manage accordingly.  Chart as Below for the entry into this Short Trade on the Chipotle Stock.

chipotle stock

 

10/09/14 – This potential Trend Reversal trade on the Chipotle Stock is setting up very well with 7/8 of my trade setup indicators in the green for this type of trade.  One of the main strengths of these potential trades is the behavior of the recent trend and in particular the Wave 4 in that movement. For this Bullish movement on the Chipotle Stock price the Wave 4 behaved within the parameters set out in my “With trend” strategy and it could be argued that the only tick that is missing above for the TJ’s Ellipse in fact could be in the green as the price just about held on to the TJ’s Ellipse.  Another observation from the Wave 4 pull back as that the extreme was formed where the weekly bar was in fact a hammer head type Doji.  The Whole Elliott wave movement for the this preceding Bullish trend was completed (thus far) with the Wave 5 hitting the target price zone and holding onto it. An initial movement down out of this target zone/resistance zone for this Chipotle stock could indicate a potential reversal is forming.

As for all potential Trend Reversal trades a conservative approach to entry is critical as at this stage we do not know whether it may just be a correction to the downside or a bearish reversal.  Until the price moves and closes below the previous trends wave 4 price then we treat it as a correction and look for a Risk to Reward to that price and in this case it is above the minimum 1:1.6 that I need to get into a trade.  So at this point I am putting on a Stop Sell order@ 620.41 which is below the 6/4 MA Low line giving a conservative entry for this trade.  I will adjust this each week if the trade does not trigger but will not adjust into the original target zone.  Stop Loss is @ 700.35 which is above the Wave 5 High.  The initial Take profit Limit order will be set below the Wave 4 price @ 458.21 giving a potential Risk to reward of 1:2.  Charts s below for this potential trend reversal trade on the Chipotle Stock.

chipotle stock CMG#1 CMG#2

paul.bratby@hotmail.com'

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