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Chipotle Mexican Grill’s shares rose in after-hours trading last Thursday evening, after the company beat Wall Street’s expectations for revenue and profit on its quarterly earnings report. Bulls, understandably, were rejoicing, and there was nary a confident bear in sight.

Awesome for longs with conviction, right? If you were just generally glancing at the situation, then you would most certain have to say those longs were in great shape going forward.

Well, if they had been holding longs profitably for months on end with plenty of cushion, then Friday’s peculiar reaction by the market during normal trading hours was not the end of the world. However, those observers paying attention to detail for the reaction to the initial reaction saw something that was telling for the near term outlook of the stock. Thursday evening’s after-market gains turned into a very high volume selling event on Friday. The extraordinarily steep rising channel that the stock had been climbing through since last Thanksgiving finally gave way. Now, that does not mean that the market is telling us that people will stop eating burritos anytime soon.

What it does mean, though, is that the rubber band had become a bit too stretched, and big-time market players used a solid earnings report as an excuse to sell. So long as the bulls cannot pull the carnitas out of the sombrero and recapture the $430 area with strong buying volume, I like CMG as a short opportunity in a flat or weak market, though I would not be surprised to see some flopping around first.

See Also: Reacting to the Reaction of a Bad Event

Also check out the long-legged doji and subsequent move lower last week after earnings on VMW (Hat Tip to 12631 member “boomrblowup”). Similar analysis applies there.

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I still have a heavy cash position, but inside 12631 I have been short Priceline.com. The stock has had a tremendous run this year, but saw some heavy selling volume in recent weeks to accompany churning price action. This tends to indicate that institutional players are aggressively exiting the position, even if it is only profit-taking. Either way, I like the risk/reward profile here for a short swing play, despite whatever shenanigans might come into play on an options expiration Friday into the bell.

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The only thing that Charlie Munger and Warren Buffett have famously guaranteed about the future of Berkshire Hathaway’s share price is that the stock’s performance will be nowhere as good as the past. Indeed, you are talking about a legendary appreciation by Berkshire’s shares over the past few decades that will be extremely difficult to replicate by any company in the coming years. In some respects, you can argue that the old-timers still holding onto their precious Berkshire shares from the 1970’s are spoiled rotten if they are assuming another casual ten-bagger is on tap anything soon. At the same time, I am inclined to think that plenty of those old-timers are of the same frame of mind of Buffett and Munger, considering themselves actual long-term owners of Berkshire rather than mere speculators.

The recent news of Buffett’s seemingly benign early-stage prostate cancer diagnosis has had a minimal effect on the share price of BRK-A. However, there may be a figurative lid being placed over the stock until the inevitable successors for Buffett and Munger take over and make a few decisions for the market to judge. It can be argued that Apple’s stock saw a similar effect in the final months of Steve Jobs’ life. Obviously, there is no telling when the Buffett/Munger succession will come, be it a few quarters or several more years.

In the meantime, though, there is no denying that Berkshire is a bonafide empire full of cash cows with moats galore. The market may or may not need to see the replacements emerge and prove themselves, but technically Berkshire is building towards a resolution. As you can see below on the weekly chart of BRK-A, the early birds looking for an imminent breakout have been disappointed in recent years. The reason for the disappointment is because Berkshire is working through a massive symmetrical triangle. You can expect more backing, filling, and churning until we get the real deal breakout.

While the early bird special has been anything but, I expect the eventual breakout to be up and out. You are talking about four years worth of consolidation that will lead to that explosion, which should be a powerful one. While the future price appreciation percentages may not be quite as jaw-dropping as the past for Berkshire’s shareholders, patient investors are not likely to be disappointed anytime soon.

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Here are three stocks that continue to set up well and are displaying impressive relative strength today. I would not necessarily buy them all right now, since they could merely be holdouts before the broad market takes them lower, as can happen often during corrections. However, I would keep them on watch in the even the market stabilizes, as they should then outperform to the upside.

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