Assessing a Trio of Trades

Chipotle Mexican Grill (CMG) is exactly one of the reasons I have been a little less active since the beginning of the year. It is all right to have a bias in this market, but one must have patience. Wait for your trigger. When trading, especially based on technical patterns, waiting for the triggers rather than anticipating them is essential. There will be patterns invalidated by fundamentals, the overall market or just because they don't play out. In other words, there will be patterns which amount to nothing, so anticipating them is just plain wrong. As I mentioned on Monday, the chart seemed poised for volatility. That was correct. I was even looking for a $20-$25 move before earnings – which was also correct.

I have the $275-$280 area as support, which now becomes resistance, but it is a little harder to say that was correct since we are slightly below right now. Maybe folks will give me a wash on that one. However, I was more excited about playing the upside breakout rather than the downside breakdown -- and that was the wrong call. In the end, the straddle, which could be had for a little below $30, should be off the books now as it hit nearly $35 this morning. There is no need to wait for the earnings catalyst at this point. There is far too much risk of a recovery....439 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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