MELI closes within prior day's range after lackluster session
MercadoLibre Inc. (MELI) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
MELI ended Thursday at 489.56 edging higher $6.91 (1.43%), notably underperforming the Nasdaq 100 (5.72%). Trading up to $22.20 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, MELI gained 7.07% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (MELI as at Mar 26, 2020):
Thursday's trading range has been $33.64 (6.87%), that's below the last trading month's daily average range of $46.35. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MELI. Prices continued to consolidate within a tight trading range between 467.15 and 518.85 where it has been caught now for the last three trading days.
One neutral candlestick pattern matches today's price action, the Doji.
After trading down to 467.15 earlier during the day, MercadoLibre bounced off the key technical support level at 472.25 (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 525.53 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 518.85 where further buy stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for MercadoLibre. Out of 762 times, MELI closed higher 52.62% 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 58.01% with an average market move of 1.48%.