If you're a Chipotle fan, you might want to hold off on the extra jalapeños for a bit. The burrito chain's stock took a dip Tuesday as federal health officials continue to investigate a Salmonella outbreak that's been linked to fresh peppers.
The Food and Drug Administration and the Centers for Disease Control and Prevention are on the case. The outbreak has been traced back to jalapeños from Sinaloa, Mexico, distributed by Coast Citrus Distributors. So far, 345 people across 27 states have gotten sick, with 36 hospitalizations. No deaths have been reported.
Chipotle Pulled Affected Jalapeños
Here's where it gets interesting for Chipotle specifically. Of the 191 people interviewed, 177 — that's 93% — said they ate at a Mexican-style restaurant before falling ill. Both Chipotle and QDOBA locations were mentioned.
Chipotle had received jalapeños from Coast Citrus and started swapping suppliers at the affected restaurants on July 20. The company says it's no longer serving the affected product. The FDA has said it doesn't believe there's an ongoing risk to consumers at Chipotle or QDOBA now that the restaurants have pulled the tainted peppers.
Technical Troubles
But the Salmonella news isn't the only thing weighing on the stock. Chipotle has been struggling for a while. Shares are down 23.25% over the past 12 months.
The stock is trading below several key moving averages. It's 7.8% below its 200-day simple moving average of $34.65. It's also 5.9% below the 20-day SMA of $33.94 and 3.1% below the 50-day SMA of $32.97.
There's a small silver lining: the 20-day SMA is still above the 50-day SMA, which is a mildly positive short-term signal. But momentum is weak. The MACD is below its signal line, and the histogram is negative. That suggests the recent rebound is losing steam.
Key resistance sits near $33.50, with support around $31.
At the time of publication Tuesday, Chipotle shares were down 0.70% at $31.91.
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