MELI Plunges 2.6% Amid Bearish Signals and Sector Pressures: What’s Next for Mercadolibre?

Summary
• Mercadolibre’s stock (MELI) slumps 2.65% to $1,914.53, nearing its 52-week low of $1,646.00
• Technical indicators like MACD (-34.22) and oversold RSI (45.81) highlight short-term risks
• KraneShares 2x Long MELI ETF (KMLI) underperforms with a -5.53% drop

Mercadolibre’s sharp intraday decline has ignited urgency among traders, with technical indicators and sector dynamics painting a complex picture. The stock’s 2.65% drop to $1,914.53 has pushed it closer to its 52-week low, while bearish patterns like the bearish engulfing candle and negative MACD (-34.22) amplify near-term risks. With Amazon’s muted performance (-0.27%) and broader retail volatility, investors are recalibrating strategies as MELI’s 50.62x P/E ratio highlights valuation concerns.

Bearish Technicals and Fintech Expansion Concerns Drive MELI’s Sharp Decline
Mercadolibre’s intraday selloff is driven by a confluence of bearish technical signals and sector-specific headwinds. The stock has breached key support levels, with RSI at 45.81 (oversold territory) and a bearish engulfing pattern confirming short-term weakness. Meanwhile, the broader Internet Retail sector faces margin pressures from rising competition and shifting consumer spending. Amazon’s muted performance (-0.27%) underscores a cautious retail environment, while MELI’s 52-week low proximity ($1,646.00) amplifies near-term bearish sentiment. The company’s aggressive fintech expansion, including a $750 million debt issuance in 2033, raises questions about long-term risk-reward dynamics.

Internet Retail Sector Mixed as Amazon Holds Steady Amid MELI's Slide
While Mercadolibre’s 2.65% decline outpaces Amazon’s 0.27% dip, the sector’s mixed performance reflects divergent strategies. Amazon’s stable pricing contrasts with MELI’s aggressive fintech expansion, which now faces scrutiny over its 50.62x P/E ratio. Sector peers like Shopify (+1.11%) and Sea Limited (+0.56%) show resilience, but MELI’s 2026 debt issuance and expanding credit book raise concerns about long-term risk-reward dynamics.

Bearish Positioning and ETF Exposure in a Volatile Retail Landscape
• KraneShares 2x Long MELI Daily ETF (KMLI): -5.53%
• 200D MA: $2,270.39 (above), 30D MA: $2,079.76 (above), RSI: 45.81 (oversold)
• Bollinger Bands: $1,921.77 (lower band), $2,163.89 (upper band)
• MACD: -34.22 (bearish), Histogram: -3.16 (diverging)

Mercadolibre’s technical profile favors bearish positioning, with key support at $1,921.77 and resistance at $2,079.76. The KraneShares 2x Long MELI ETF (KMLI) offers leveraged exposure but has underperformed with a -5.53% drop, reflecting market skepticism. For options, two contracts stand out:

• MELI20260918C1980 (Call): Strike $1,980, Expiry 2026-09-18, IV 0.10%, Delta 0.0086, Theta -0.0026, Gamma 0.0134, Turnover 0
• MELI20270617C2040 (Call): Strike $2,040, Expiry 2027-06-17, IV 0.03%, Delta 0.0174, Theta -0.0026, Gamma 0.0541, Turnover 0

Both contracts exhibit extreme leverage ratios (382,802%) and near-zero implied volatility, suggesting limited liquidity and speculative appeal. A 5% downside scenario (targeting $1,818.80) would yield a put option payoff of $71.20 for the $1,980 strike. Aggressive bears may consider shorting MELI20260918C1980 if the $1,921.77 support breaks, but low IV and turnover demand caution.

Backtest Mercadolibre Stock Performance
The backtest of MELI's performance after a -3% intraday plunge from 2022 to now shows favorable results, with win rates and returns indicating the stock's resilience and potential for positive gains in the following days:

MELI at Critical Juncture: Watch for Support Breakdown or Sector Rebound
Mercadolibre’s 2.65% decline has created a pivotal juncture, with technical indicators and sector dynamics suggesting a potential rebound or further consolidation. The stock’s proximity to its 52-week low ($1,646.00) and oversold RSI (45.81) hint at near-term buying opportunities, but bearish engulfing patterns and negative MACD (-34.22) caution against overexposure. Investors should monitor Amazon’s (-0.27%) performance as a sector barometer and watch for a decisive break above $2,079.76 to reinvigorate bullish sentiment. For now, a disciplined approach—balancing short-term bearish positioning with long-term sector optimism—remains prudent. Watch for $1,921.77 support breakdown or a 5% rebound to $1,914.53.