It looked like I would be stopped out of my last bit of Chipotle’s this morning. It was upsetting for sure because I have owned it from day one and been blogging about it pre-IPO. There must be 100 posts where I have mentioned it . With it’s close back above $104 I will keep it and use today’s low as a final stop.
It has been such a great ride and I have even traded the beast well, chronicling it along the way. One of my biggest winners where I just could see and feel the stock higher.
The stock was overvalued the day I paid up $20 post IPO and felt screwed. That was at $40. I sold along the way up and when I sold some at $108 and $130 was bummed to see it hit $150 plus. That’s the way it is with the best growth stories.
It’s a perfect case study for a growth and momentum stock . The growth is still early, but the momentum is gone. You need to separate that or you give back all your profits.
If the growth continues, I think it will, the momentum will return. In the meantime, the market’s mood will have to get better and the market stronger to carry the multiple it carries for a restaurant stock. Not that complicated.
PS – This was such a good Wallstrip. Looking forward to seeing Lindsay back sometime soon on her new web show for CBS Moblogic.tv
say, on the subject of trends. I am curious as to what did your friends at Blackstar do with LFC?
A while back you said that it became their best trending stock without a single stop hit along the way.
I follow trends using a volatility based trading system that I developed in TradeStation.
I never traded LFC but according to my system the first stop since Oct. of 2004 would’ve hit two weeks ago.
What does their model/trading show?
thanks.
somewhere in the high 60’s but I will check for sure.
We had two scale out trades on the way up; sold the remaining position at approx $66 on Jan-15.
Thanks Eric for the info.
That’s pretty interesting, I did not realize that you used the 200 day MA as your stop. I also did not realize that you would scale out on the way up in a trend following system. Especially that LFC was never over 100% above its 200 day MA.
I have struggled with these two issues during my system development. After months of back-testing and thousands of charts i settled on not scaling out unless the stock gets at least 100% above its 200 day MA. and even then I tighten my trailing stop instead of just selling out. Probably not the best approach but at least it allows for automation.
thanks again for the info.