MercadoLibre Stock Rises 3.5% to Near Record High on Bullish Technical Breakout

Mercadolibre (MELI) advanced 3.49% in the latest session, marking two consecutive days of gains totaling 3.63%. This upward momentum positions the stock near recent highs and warrants a detailed technical assessment.
Candlestick Theory
Recent candlestick patterns reveal a bullish breakout. The session on June 16 formed a robust green candle with a low of 2,380.1 and a high of 2,466.72, closing near the session peak at 2,454.76. This candle decisively breached the previous resistance at 2,448.67 (June 10 high), invalidating the short-term consolidation between 2,332.73 and 2,448.67. The breakout on above-average volume suggests conviction, establishing 2,380–2,420 as immediate support. Resistance now resides at the year-to-date peak of 2,486.91 (June 9), with a sustained close above potentially targeting 2,500.
Moving Average Theory
MELI trades above all key moving averages, confirming a bullish long-term bias. The 50-day MA (approximately 2,210) and 100-day MA (roughly 2,150) slope upward, with the 200-day MA (around 1,990) providing a steady support base. The price holding above the 50-day MA through recent pullbacks signals resilience. A golden cross (50-day above 200-day) remains intact, reinforcing the structural uptrend. This alignment suggests the path of least resistance is upward, though a decisive break below the 50-day MA (2,210) would warrant caution.
MACD & KDJ Indicators
MACD shows bullish momentum acceleration, with the MACD line crossing above the signal line on June 16. This occurred near the zero line, suggesting a transition from neutral to positive territory. The KDJ oscillator reflects overbought conditions (K:85, D:78, J:99), with the %J line above 90. While this indicates near-exhaustion upside potential, the strong momentum crossover implies short-term strength may persist. However, traders should monitor for bearish divergence if price makes new highs without corresponding KDJ confirmation.
Bollinger Bands
Bollinger Bands (20-day, 2 SD) expanded significantly on June 16, reflecting a volatility surge accompanying the breakout. Price closed near the upper band (2,470), typically signaling overbought conditions in the immediate term. This expansion follows a contraction phase in early June, indicating a resolution of consolidation in favor of bulls. A retreat toward the middle band (20-day MA near 2,340) would offer a potential dip-buying opportunity, provided the band maintains its widening trajectory.
Volume-Price Relationship
Volume analysis supports the breakout’s validity. The 350,870 shares traded on June 16 exceeded the prior session’s 341,643, confirming accumulation. This volume surge during an upmove contrasts with the distribution pattern observed during the June 6–12 decline (volume averaging 450,000 on down days). The absence of climactic volume relative to the May peaks (e.g., 906,096 shares on May 8) suggests room for additional upside, though sustainability requires continued volume confirmation.
Relative Strength Index (RSI)
The 14-day RSI (calculated at 68) approaches overbought territory (>70) but hasn’t triggered a warning. This positioning reflects strengthening momentum without immediate exhaustion. Historical RSI behavior shows MELI can sustain readings above 70 during powerful trends (e.g., February’s rally), though reversals often follow such extremes. The current trajectory suggests room for marginal upside before overbought risks materialize. Traders should watch for bearish divergence if RSI fails to match new price highs.
Fibonacci Retracement
Applying Fibonacci to the recent correction swing (June 9 high: 2,486.91 to June 13 low: 2,332.73), MELI surpassed the 61.8% retracement (2,428.01) and closed above the 78.6% level (2,453.92). This robust recovery implies bulls are targeting a full retracement to 2,486.91. Confluence exists as this level aligns with the psychological 2,500 barrier. A decisive break above 2,486.91 would open upside toward 2,600, while the 78.6% retracement (2,453) now acts as initial support.
Confluence and Divergence
Confluence is notable at the 2,450–2,470 region, where the breakout candle’s high, Fibonacci 78.6% level, and Bollinger upper band converge—reinforcing this as critical near-term support. Bearish divergences are currently absent, though KDJ’s overbought readings against rising prices warrant vigilance. MACD/RSI alignment supports further upside, provided volume sustains the breakout. A failure to hold 2,450 may trigger profit-taking toward 2,380 support.