Chipotle's Earnings Leave A Bad Taste

Chipotle Mexican Grill, Inc. CMG shares are trading lower by $29 at $376.67 in Wednesday's session. The Street has a bad taste in its mouth after huge Q3 miss coupled with a $90 million miss for revenues. Comparable sales decrease of 17.9 percent has exerted additional selling pressure on the issue.

After a lower open, it could only manage a brief rally to $388.85 before continuing its downward spiral. The ensuing decline took the issue through a major support level at the $385. Several times over the last five months (or when food quality issues began to surface), the issue descended to that area but always managed to find buyers and rebound back in the $400 handle.

However, the dismal report has many of its devoted longs hitting the exit button, perhaps for good. Accelerating the decline through the $385 area, may have been a host of protective sell-stops wanting to exit the issue if that key level was breached.

It has continued to make new lows for the day with the current one standing at $32.95. That marks the lowest level for the issue since it bottomed on July 17, 2013 at $372.13.