Is Chipotle A 'Lunatic Stock?' Technician Explains His Bullish Stance

Rick Ackerman is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.

• Chipotle Mexican Grill, Inc. (NYSE: CMG) has gained 5.6 percent this year, outperforming the S&P 500 by 10 percentage points.
• Technical Forecaster and Rick's Picks author Rick Ackerman said that Chipotle is targeting $789, 8 percent higher than current price.
• Ackerman said that the stock looks "very bullish," noting that it has high institutional interest.

Rick Ackerman called Chipotle a "lunatic stock," saying that it "just wants to go higher." Ackerman attributed the bullish sentiment to the fact that Chipotle is mainly in "institutional hands."

And, he added, it's a good stock for institutions, with earnings that are "predictable and reliable. That's a good benchmark for the institutional mindset."

He stated that it almost appears like the institutions gather, chat and agree not to sell.

Ackerman said that without any outbreak of bad news, the stock should target $789, more than 8 percent above current price, and 4 percent above the 52-week high. That target is based on a weekly chart going back to 2014, Ackerman said.

Related Link: Chipotle Mexican Grill's GMO-Free Claim Being Tested

Analysts have disagreed over Chipotle, with many firms struggling to keep targets up with the stock's movement. As an example, in August, Wedbush raised its price target on the stock by nearly 20 percent, from $620 to $740.

At the same time, the analysts reiterated their Neutral rating.

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