Chipotle Mexican Grill

How do you trade a stock that has gone public since only January 26th 2006? The stock ballooned on the first trading from its IPO price of $22 to open at $45. The stock has only moved sideways ever since, closing last friday on $42.11. The volume has also dropped from a height of 13m on the first day to a disappointing 200k average ever since. From a technical analysis standpoint, that adds up to nothing at all.

From a fundamental standpoint, it's amazing how the street has already turned its back on CMG: 5 brokerage houses have given poor gradings on the stock. Meanwhile, only 1.2% of the float is sold short, which is not really puzzling as most trading days are dojis. It's clear that traders are staying away from this stock.

The company had a very favorable coverage in the Forbes magazine. With McDonald's having a controlling share in the company, and serious interest from the public, it's hard to imagine unfavorable results in the long-run. The company has strong customer loyalty, be it facebook groups, or a few fansites.

First public earnings release is due after market close tomorrow March 13th. It'd be interesting how traders bet on the movement tomorrow during the day. A strong move is to be expected, up or down, the stock is bound to breakout on heavy volume.