Here’s your (future) trade on MercadoLibre ($MELI) – September 16, 2024

by MarketMentor
Dan Fitzpatrick here at StockMarketMentor.com. I want to talk about MercadoLibre ( NASDAQ: MELI ) today. It would have been nice to be talking about last Thursday when you saw the stock broke out.

What are we going to do now? The stock really, really popped up nicely, in one day, over 4 percent, which on a price basis is $90.00, but it’s really just 4 percent. The stock now has pulled back a bit (it’s about halfway through the trading day), which is to be expected because this squeeze took place.

The stock had already been trending higher, it was really, really steep for a while and then it consolidated. And so at this point, you would think another breakout is likely to lead to profit-taking, and it has. However, this is a big monster move, and yesterday’s volume, that’s Friday, was on lower than average volume.

So after the kind of move this has had, for this stock to just barely be down on Friday, and then today probably even lower volume still, this is the thing, I think this stock is a buy, but not yet. I think what you’ve got to do is wait for the stock, I have my alert set at 21.43. If the stock breaks out above that on heavier than average volume, I think that’s your next buy point for this stock. And I bet that it’s going to work really well.

Look, the stock’s been in a monstrous uptrend for a while, a couple of years now. It’s up near the top of its uptrending channel, but not quite yet. I’m just looking at the weekly chart to say, Okay, is it an uptrend, a downtrend or sideways? No, it’s in an uptrend. Okay, great.

Now, the daily chart, I’m zooming in, I’m seeing all the things that I just mentioned to you, a big mover higher, sideways consolidation on low volume here. Then there was another breakout on heavier than average volume, and now we’ve got some sideways consolidation on low or maybe average volume. This could last for a while, I don’t care, I’m not interested in it right now. I’m only interested in it if it breaks through my buy area here.

Free Chart