Options play on an old friend of mine
I've written many times about how great it was to be in on Chipotle's IPO day, holding as the stock nearly tripled over the years before I sold the last of my shares due to fear of general market conditions. The stock has continued to do well and the company has beaten estimates 4 quarters in a row. With a double-bump on the latest estimates, I think it will soar if they can just meet the new numbers. Even at a mid-range 28 P/E, if Chipotle ends up on track to hit the new 4.97 number, then that puts Friday's gain over today at 6% to 140, and overall positive sentiment can easily send it higher. Also, the strike pegger pattern is SBPCP (I'll explain this in a future article) which is usually a big up signal, although there is not much separation between the indicators. Lastly, the most recent news out of CMG talks of increased charitable spending, which I interpret as a covert communication to the public that they are earning so much that they need to avoid taxes, so earnings should be good. Unless they are pulling a sneaky maneuver to make earnings look so-so so they can scoop up cheap shares, which wouldn't make sense and I believe would be illegal if anyone could prove it. They've made me big bucks in the past, I trust them, so I am taking an August options bet on CMG.
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$ 163.51
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