Chipotle Mexican Grill could resume a technical downtrend after the rebound registered in recent trading sessions.

From a fundamental viewpoint the company appear overvalued. P/E Ratio for the current year is at 57x and expected at 34.8x for next year. With a valuation ratio of 3.52x, the group appears overvalued compared to its business activity.

Technically, the security could run out of steam close to the USD 542.2 resistance. Indeed, the stock is moving in an upward trend in the short term but it could know a halt. In this context, the downward movement could improve and it should expect a return to the USD 475.9 level and the USD 441. Indicators that show an overbought situation confirm this scenario.

The graphical configuration argues to establish a short trade at the current price. The end of the technical rebound, the consolidation phase and overbought situation: Chipotle Mexican Grill. has all the characteristics for short selling. The first objective will be fixed near the USD 475.9 short term support and by extension the USD 441 area. This strategy should be protected by a stop loss above the 20-day moving average.