Mercadolibre Plummets 3.8% Amid Robotics Partnership Hype: What’s Fueling the Selloff?

Summary
• Mercadolibre (MELI) plunges 3.8% intraday to $1,995.335, its lowest since October 2024
• Partnership with Agility Robotics to deploy Digit humanoid robots in Texas warehouses announced
• 52-week high of $2,645.22 now 28% above current price
• Analysts remain bullish with $2,848.82 average price target despite selloff

Today’s sharp decline in Mercadolibre defies the optimism surrounding its robotics collaboration, as traders weigh execution risks against long-term automation potential. The stock’s 3.8% drop has pushed it closer to key support levels, while sector peers like Amazon (AMZN) rally 1.5%. With technical indicators flashing bearish signals and options activity muted, the market is testing whether this selloff is a buying opportunity or a warning sign.

Robotics Hype vs. Execution Risks
Mercadolibre’s partnership with Agility Robotics to integrate Digit humanoid robots into fulfillment operations has sparked mixed reactions. While the collaboration promises to address labor shortages and boost warehouse efficiency, investors are skeptical about the timeline for ROI and operational scalability. The stock’s 3.8% drop suggests concerns over short-term costs, integration challenges, and whether the technology can deliver promised productivity gains. Additionally, the recent 70.7% stake reduction by Night Squared LP and broader market jitters over tariffs and inflation have amplified selling pressure.

Internet Retail Sector Mixed as Amazon Leads
The Internet Retail sector remains fragmented, with Amazon (AMZN) surging 1.5% on strong holiday sales momentum. However, Mercadolibre’s selloff highlights divergent investor sentiment: while Amazon benefits from robust e-commerce demand, MELI faces near-term execution risks tied to its robotics rollout. The sector’s average P/E of 50.62 underscores optimism about long-term growth, but MELI’s 52.76 P/E and 1.42 beta indicate higher volatility and skepticism about its automation-driven value proposition.

Technical Downtrend and Options Playbook
• 200-day MA: $2,273.62 (below) • RSI: 51.3 (neutral) • MACD: -19.9 (bearish) • Bollinger Bands: Price at $1,995.335 (near lower band at $1,946.24)

Mercadolibre’s technicals paint a bearish picture, with price testing the 200-day MA and RSI hovering near oversold territory. Key support levels at $1,946.24 (lower Bollinger Band) and $2,056.49 (30D support) are critical for near-term stability. A breakdown below $1,946 could trigger a retest of the 52-week low at $1,646. The 200D MA at $2,273.62 remains a distant resistance, suggesting a long-term bearish bias. With no leveraged ETFs available, traders should focus on options.

Top Options Contracts:
• MELI20260918C2060 (Call, Strike $2,060, Exp: 2026-09-18): Delta 0.0226 (low), IV 0.03% (extremely low), Theta -0.0067 (slow decay), Gamma 0.0902 (moderate sensitivity).
• MELI20271217C2170 (Call, Strike $2,170, Exp: 2027-12-17): Delta 0.0253 (low), IV 0.02% (extremely low), Theta -0.0029 (slow decay), Gamma 0.1130 (moderate sensitivity).

Both contracts suffer from negligible turnover (0) and minimal implied volatility, making them unsuitable for active trading. A 5% downside scenario (price at $1,895.57) would yield zero payoff for the MELI20260918C2060 call, as the strike price ($2,060) exceeds the projected price. Aggressive short-sellers might consider cash-secured puts if liquidity improves, but current conditions favor a wait-and-watch approach.

Backtest Mercadolibre Stock Performance
The backtest of MELI's performance after a -4% intraday plunge from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 52.32%, the 10-Day win rate is 54.78%, and the 30-Day win rate is 58.47%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 6.67%, which occurred on day 59, suggesting that MELI has the potential for recovery and even surpassing its pre-plunge levels.

Bullish Fundamentals vs. Bearish Technicals: What to Watch Now
Mercadolibre’s robotics partnership and strong analyst ratings ($2,848.82 average target) suggest long-term upside, but near-term technicals and execution risks are fueling the selloff. Traders should monitor the $1,946.24 support level and Amazon’s performance as a sector barometer. If MELI breaks below $1,946, a retest of the 52-week low becomes likely. Conversely, a rebound above $2,058.34 (middle Bollinger Band) could reignite bullish momentum. With Amazon (AMZN) up 1.5%, sector strength may eventually lift MELI, but patience is key in this volatile phase.