Chipotle's stock is having its best quarter ever—here's how to play it

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Chipotle’s stock is sizzling.

Shares of the fast-casual chain are on pace for their best quarter ever, up about 60 percent year to date and some 80 percent from the December lows.

On Tuesday, the stock reached its highest level since 2015.

Given the surge, market watchers tell CNBC it’s not yet time for investors to take advantage of Chipotle’s red-hot rally.

Erin Gibbs, research analyst at S&P Global Market Intelligence, said Tuesday that while the company’s double-digit profit growth, expansion plans and mobile-ordering boost are generally promising, the stock has run too much for her taste.

“It’s a little pricey at this point,” she told CNBC’s “Trading Nation.” “Its valuations are very extended, and … if they don’t beat these really high expectations, if they don’t hit every single number, I’m worried about the negative part and [expectations] coming down. And we already know from last year [that] health concerns, data breach, anything can send this stock plummeting. So I’d like to see an entry point closer to about $615. That would make me feel more comfortable.”

Frank Cappelleri, chief market technician at Instinet, was also somewhat cautious, telling CNBC in the same segment that the stock has looked “extended” since mid-January.

Cappelleri noted that if Chipotle’s stock can break out of its current inverse head-and-shoulders pattern, it could rally into the $700s. But with the current reading on its relative strength index, which tracks buying and selling pressure, he said he’d also advise investors to wait for a better entry point.

“The RSI is at 86, and that is the second-highest level we’ve seen in its entire history,” he said. A reading over 70 indicates that a security is overbought.

“At this point, the stock has done nothing wrong except go up,” Cappelleri said. “I think it pauses, and we take advantage of that and buy it on weakness.”

Shares of Chipotle made a new 52-week high of $692.75 a share on Tuesday, closing slightly lower at $688.82. They were up 1.7 percent in Wednesday’s premarket. Shares are up nearly 110 percent in the last 12 months.

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