Chart of the Week: Mercado Libre
Hey, good morning all people. Completely satisfied Wednesday! It’s time for our chart of the week. And this week we’re going to be specializing in South American firm/Brazilian firm Mercado Libre; image is MELI. Let’s check out this chart. Had a pleasant breakout final week and adopted by way of, so let’s have a look and see what we are able to work out on this one.
As you may see right here on the chart, the resistance stage was roughly about $1,840, $1845. And that is available in on a excessive quantity day, following a excessive quantity day again in March. We tagged that stage and got here down sharply on earnings, and got here sliding down on fairly good quantity. Fairly good pattern down. We hit that low round $1,350 and it was off to the races. And now we have even a spot up right here too.
However what transpired right here for the previous 2 1/2 months was principally a range-bound inventory. So we see the inventory was caught in a spread from about $1,550 as much as about $1,770. It was bouncing round right here. After which lastly a couple of week or so in the past, it received a escape. And it broke out above that March excessive on actually good turnover. So you may see that turnover proper right here.
Indicators are bullish
Indicators are fairly robust. Actually, check out the MACD – it’s on a purchase sign over right here. We even have a really bullish Chaikin cash circulation right here. RSI is up close to the excessive ranges the place we’ve seen the inventory pull again just a little bit.
Except you wished to become involved proper now, I’d in all probability look forward to a little bit of a pullback. Perhaps again all the way down to this blue line over right here that we put in right here. That is likely to be a spot so as to add some shares. The inventory’s going to make a run after it comes again and retests that stage. We’d wish to see if this space between $1,800 and $1,840 holds on a little bit of a pullback.
Look ahead to a pullback
I don’t know when that pullback’s gonna occur. We might be overbought and keep overbought for some time. We noticed that occur again in November of final 12 months. We received overbought simply earlier than Thanksgiving, and the inventory stayed excessive and it stored going increased for about one other 200 factors whereas it was overbought.
Keep in mind one thing: Overbought is only a situation, it’s not a sign. It tells you the place the shares are at a sure time limit. However you want to bear in mind that when a inventory is overbought that corrections and pullbacks are topic to occur. The inventory turns into very weak at that time.
I do like Mercado Libre over right here. It’s an costly inventory. And for those who’re enjoying choices, choices are additionally typically very costly. However that’s OK. Keep in mind one thing: When you’re enjoying choices, it’s a fraction or proportion of the inventory that you just’re enjoying. It’s a excessive greenback inventory. There’s a whole lot of shares up there, like Reserving Holdings – additionally excessive greenback inventory. UNH is one as properly.
However on this specific case – Mercado Libre – we expect that there’s going to be just a little little bit of a pullback right here to the assist line after which a pull up probably over $2,100, possibly $2,150. In order that’s Mercado Libre.
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