MELI slides to lowest close since July 11th
MercadoLibre Inc. (MELI) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MELI ended the week -9.6% lower at 303.42 after losing $1.44 (-0.47%) today on high volume, strongly underperforming the Nasdaq 100 (2.77%). Today's close at 303.42 marks the lowest recorded closing price since July 11th. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MELI as at Oct 12, 2018):
Friday's trading range has been $18.81 (6.03%), that's slightly above the last trading month's daily average range of $16.62. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MELI.
After trading down to 295.40 earlier during the day, the share bounced off the key technical support level at 303.24 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 316.11 (R1). After having been unable to move lower than 298.07 in the prior session, the stock found buyers again around the same price level today at 295.40. The last time this happened on Monday, MELI gained 0.16% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
With prices trading close to this year's low at 281.00, downside momentum could speed up should MercadoLibre Inc. break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Close to S1 Support" stand out. Its common bullish interpretation has been confirmed for MercadoLibre Inc.. Out of 1,087 times, MELI closed higher 55.20% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.67% with an average market move of 1.90%.