Sizzling Stocks:

In tribute to the esteemed Charlie Munger, Bankfluence seeks to distill his profound financial wisdom into an investment aligning with his principles. Focused on Charlie and Warren's mantra to "Buy great businesses at decent prices," we navigate away from the unwarranted risks associated with mediocre businesses at mediocre prices.

In adherence to our December theme of 'inertia,' we've identified an opportune investment for capitalizing on year-end market strength – commonly recognized as 'The Santa Claus Rally.' Whether you subscribe to top-down analysis, the adage of buying high and selling higher, or embrace the inertia of breakaway stocks, we offer a well-founded perspective for your consideration! 

Unveiling the star performer: Chipotle Mexican Grill ($CMG). Soaring to a new all-time high post Q1 2023 earnings, with EPS surpassing analyst consensus by 17%. The quarterly EPS of 10.5 reflects an impressive 84.2% YoY surge. Noteworthy is the 490 basis points surge in restaurant-level operating margin to 25.6%. Chairman and CEO, Brian Niccol, emphasizes, "Our robust Q1 performance affirms that our back-to-basics approach and commitment to excellence are yielding results. We remain dedicated to cultivating exceptional talent, crafting outstanding cuisine, and cherishing each guest, fortifying our foundation for sustained long-term growth." After reaching a new all-time high, Chipotle underwent consolidation, shifting from $2100/share to $1800/share between May and October. The buoyant forecast outlined in the Q3 2023 report, complemented by a strategic share repurchase of $227 million during the quarter and optimistic guidance for 2024, stands as the driving force propelling the sustained market momentum.

Zooming out and engaging in technical analysis reveals that Chipotle is still amid its latest impulse wave. Commencing from the 2020 bottom as the initiation point, the recent sequence unfolds as follows: Wave 1 culminated in late 2021, reaching around $1950/share. Subsequently, shares retraced approximately 37%, settling at the 0.5 Fibonacci level at $1196/share, marking the bottom of wave 2. A retracement surpassing the 0.786 and 0.618 levels to 0.500 or below typically generates sufficient momentum for pursuing target extensions of 1.618 or 2.00. Currently in progress, Wave 3 presents promising upside targets of: 

1. PT # 1 - $2573 (1.414 extension)

2. PT # 2 - $2885 (1.618 extension)

3. PT # 3 - $3467 (2.000 extension)