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CMG - Chipotle Mexican Grill reported earnings last night after the bell rang. The Denver-based restaurant chain posted a weaker-than-expected fourth quarter late Thursday and warned that 2008 will “be a challenge, characterized by pressures on food costs and restaurant level margins.” While sales in established restaurants rose nearly 11 percent in the fourth quarter, Chipotle expects that growth will slow to a mid-single digit pace or lower in the coming year. The company’s comments offer up another sign that even if the economy avoids a recession, it’s getting harder for companies in all sorts of businesses to make money.

If you didn't cover the position on 2/7 when I first posted that the stock broke the support, you should do so now. CMG has gapped below the 105 strike. When this happens, it is usually prudent to cover the put position. Also, the comments are contrary to the assessments of the fundamental research made. Finally, as initially outlined, the position was a higher risk position with EPS coming out before expiration.

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