Chipotle Mexican Grill is a popular Mexican fast casual restaurant chain. It has stores in the US, UK, Canada, Germany, and France. The company has a strong brand, extensive presence in its primary market, and benefits from customer stickiness through its rewards/loyalty program. Chipotle also has perfected the “fast casual” service with a simplified menu and on-the-go food delivery. In a post-COVID world, Chipotle’s affordability, convenience, and assembly line-like efficiency bodes well for longer-term growth prospects.

The 10-year monthly chart for Chipotle shows short uptrends in 2011 and 2013-2014 before sideways and downward movement till about 2018. The stock then rose almost 5X. The strong uptrend respected the bottom trendline throughout except during the pandemic-led crash of March 2020. However, the price recovered within a couple of months and shot up before finding resistance at the $1580 level. It eventually broke out of that level in July 2021 and peaked at $1950 before pulling back. The pullback has seen the price drop close to the $1580 level, a historical resistance which is likely to act as a support. A reversal, therefore, seems very likely as the price is near the confluence of the support level and the bottom trendline. A long position can be initiated with a target of $1926 and a stop loss at $1236.