MELI pushes through key technical resistance level
MercadoLibre Inc. (MELI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, MELI finished the week 13.78% higher at 735.01 after gaining $16.48 (2.29%) today on high volume, strongly outperforming the Nasdaq 100 (0.29%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 735.01 marks the highest recorded closing price ever. The bulls were in full control today, moving the market higher throughout the whole session. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (MELI as at Feb 14, 2020):
Friday's trading range has been $16.99 (2.36%), that's below the last trading month's daily average range of $24.02. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MELI.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 725.19 (now S1), which is likely to act as support going forward. The last time this happened on Wednesday, MELI gained 2.67% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 674.69.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Its common bullish interpretation has been confirmed for MercadoLibre. Out of 535 times, MELI closed higher 53.08% 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 57.76% with an average market move of 1.76%.