Chart of the Day: This Stock Is Looking Pretty Spicy

With a series of higher lows on the daily chart, Action Alerts PLUS stock Chipotle (CMG) is looking quite strong. However, we should note the stock is elevated and pushing overbought conditions, so this might not be the ideal time to add more shares.

Yet, volume trends are bullish now while the indicators are on strong buy signals. Notice the TDI indicator (relative strength, Bollinger Bands) at the bottom pane, which crossed over in mid-March and continues to move higher. MACD (Moving Average Convergence Divergence) is also on a buy signal while money flow has improved sharply from the start of the month.

There is strong resistance from the downtrend line seen on the chart, but the candles are now blue, which means strong buy. We could see this stock make another run at 1800 (mid-2022 high) before too long.

Again, after this sharp run higher from the start of March we would suggest holding back to add more shares, but even a minor retreat towards the 1570-1600 level would be a good spot to add. We rate Chipotle a Two in the AAP portfolio, which means stockpile or add on pullbacks.

https://share.trendspider.com/chart/CMG/4669tpb9s7

Action Alerts PLUS is Long CMG.