However, part of the negative sentiment surrounding Chipotle is the company's inability to cut back on labor costs, Sanchez said. This should be viewed by investors as a "real issue" and a legitimate "concern" at a time when recent strings of bad publicity from a food safety standpoint remain in place.

On top of that, Chipotle is the "most expensive stock right now" relative to some of its closest peers, including Jack in the Box Inc. (NASDAQ:JACK), she also said.

The Charts Are Supportive

Chipotle's stock was trading at $321 Thursday, which implies a downside scenario of around $20 per share if the stock's pattern continues to hold up. But if the stock could rally and break above its prior highs last week at around $332 it can show that on a technical level "the worst might actually be behind it," he said.

But on the other hand, if Chipotle's stock breaks meaningfully below the $300 mark then investors will have a big problem.