Mercadolibre (MELI) Plunges 3% Amid Profit-Locking and Macro Fears – What’s Next?

Summary
• MELI trades at $2,180.31, down 3.14% intraday
• Intraday range: $2,160.00 to $2,246.08
• Turnover: 315,634 shares, 0.67% of float
• 52-week high/low: $2,645.22 / $1,646.00

Today’s sharp selloff in Mercadolibre has sent shockwaves through the fintech and e-commerce sectors. With no company-specific catalyst, the decline reflects broader macroeconomic jitters and profit-taking after a volatile year. The stock’s 3.14% drop has pushed it closer to key support levels, raising questions about whether this is a buying opportunity or a deeper correction.

Profit-Locking and Macro Fears Drive Sharp Selloff
Mercadolibre’s intraday decline of 3.14% appears driven by a combination of profit-taking and macroeconomic uncertainty. With no material news from the company, the move aligns with a broader 'risk-off' sentiment triggered by fears of a U.S. government shutdown and a drop in consumer confidence. The stock’s price action—falling below its 30-day moving average of $2,402.14 and testing the lower Bollinger Band at $2,217.38—suggests short-term bearish momentum. Traders are likely reacting to the absence of positive catalysts and the stock’s elevated dynamic P/E ratio of 54.34, which makes it vulnerable to shifting risk appetites.

Internet Retail Sector Mixed as Amazon Holds Steady
The Internet Retail sector, led by Amazon (AMZN), has shown mixed performance. While AMZN’s intraday price change of +0.21% indicates resilience, Mercadolibre’s sharp decline highlights divergent investor sentiment. The sector’s broader struggles with macroeconomic headwinds—such as rising interest rates and inflation—have created a bifurcated landscape. However, MELI’s drop is more attributable to its own valuation pressures than sector-wide dynamics.

Technical Divergence and Options Leverage: A Bearish Playbook
• 200-day MA: $2,214.14 (below current price)
• RSI: 43.34 (oversold territory)
• MACD: -16.73 (bearish divergence)
• Bollinger Bands: Price at $2,180.31, near lower band ($2,217.38)

The technical setup suggests a short-term bearish bias, with key support at $2,337.26 and resistance at $2,405.15. The RSI’s oversold reading hints at potential near-term rebound, but the MACD’s negative divergence and Bollinger Band compression indicate caution. For options traders, the MELI20280121C2390 call option stands out: it offers a leverage ratio of 434,858% and a delta of 0.065, though its zero turnover and implied volatility of 0.01% suggest illiquidity. A 5% downside scenario (to $2,071.30) would yield a call payoff of $0 (strike at $2,390) and a put payoff of $118.70. Aggressive bears may consider shorting the stock below $2,337.26, with a stop-loss above $2,405.15.

Backtest Mercadolibre Stock Performance
Below is an interactive back-test report that visualises how a “buy-on--3 % daily plunge” strategy has performed on Mercadolibre (MELI) from 1 Jan 2022 through 3 Oct 2025. Key take-aways (concise):• The rule delivered a compound gain of roughly 94 %, translating to ~24 % annualised, with a Sharpe ratio of 0.67. • Risk was contained by an 8 % stop-loss, 15 % take-profit and a 10-day maximum holding window, limiting single-trade losses to ~-8 % and capping wins at ~18 %. • Despite a peak drawdown near 34 %, the overall reward-to-risk profile remained favourable.(The module lets you drill into entry dates, trade distribution, equity curve, etc.)Feel free to explore the interactive panels to examine trade-by-trade results or tweak the parameters further.

Bullish Long-Term Outlook Amid Short-Term Volatility
While today’s selloff tests Mercadolibre’s near-term resolve, the stock’s 52-week high of $2,645.22 and strong fundamentals suggest this is a buying opportunity for long-term investors. The key will be whether the stock holds above $2,337.26; a breakdown could trigger a retest of the 52-week low at $1,646.00. Meanwhile, Amazon’s 0.21% rise underscores the sector’s resilience. Watch for a rebound above $2,405.15 to reignite bullish momentum.