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  1. Home
  2. / Investing
  3. / Consumer Staples

I'm Preaching Patience for Chipotle in 2016

CMG is 'oversold,' but that can be ignored in a bear market.
By BRUCE KAMICH
Jan 06, 2016 | 04:53 PM EST
Stocks quotes in this article: CMG

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. 

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TAGS: Investing | U.S. Equity | Consumer Staples

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