MELI dominated by bulls lifting the market higher throughout the day
MercadoLibre Inc. (MELI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
MELI finished the week 8.55% higher at 841.31 after gaining $26.60 (3.26%) today, strongly outperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Today's close at 841.31 marks the highest recorded closing price ever. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 831.02, the market confirmed its breakout through the previous session high after trading up to $12.36 above it intraday.
Daily Candlestick Chart (MELI as at May 22, 2020):
Friday's trading range has been $38.53 (4.74%), that's far above the last trading month's daily average range of $28.16. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for MELI. Prices continued to consolidate within a tight trading range between 802.06 and 843.38 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
After having been unable to move lower than 802.06 in the prior session, the stock found buyers again around the same price level today at 804.85. The last time this happened on April 29th, MELI actually lost -3.14% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term. With its 50-day moving average crossing above its 200-day moving average, the share has entered a so-called "Golden Cross" for the first time since April 7th. Showing increasing upward momentum in the short and medium-term the "Golden Cross" is known to indicate a potential bull market on the horizon.
Among the 10 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 533 times, MELI closed higher 52.53% 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 57.60% with an average market move of 1.68%.