Chipotle (CMG) can't seem to shake bad news and sellers. Today, our Quant service downgraded CMG, and we have the charts pointed to the next support area.
The longer-term chart of CMG, above, is still pointed down. CMG broke support at $600, and then at $500 and now we are headed to next support at the round number of $400. A bearish Moving Average Convergence Divergence (MACD) oscillator and no bullish divergences from the momentum study point to further declines.
Yes, CMG is "oversold," but that can be ignored in a bear market. A stock that is oversold can either stay oversold or get even more oversold. I find it better to wait for a reversal pattern, or a bullish divergence, before trying to pick a bottom. While hope is not an investment strategy, patience is.