MercadoLibre Rebounds 3.20% Amid Key Technical Support At 2160

MercadoLibre (MELI) closed at $2,246.60 in its latest session, gaining 3.20% with trading volume of 897,107 shares. This rebound follows significant recent volatility.
Candlestick Theory
Recent sessions reveal heightened volatility: a long red candle on October 1st (-6.85%) followed by a decisive bullish candle on October 2nd (3.20%) that closed near its high. This forms a potential bullish engulfing pattern near critical support at $2,150-$2,160, established through multiple intraday tests since August. Resistance now emerges near $2,345 (October 1st high) and $2,481, aligning with the late-September breakdown point. Failure to hold $2,160 suggests vulnerability to $2,000.
Moving Average Theory
Price currently trades below all key averages: the 50-day SMA (approx. $2,350), 100-day SMA (approx. $2,410), and 200-day SMA (approx. $2,280), confirming the intermediate-term downtrend. The bearish alignment (50-day < 100-day < 200-day) persists. A sustained move above the 200-day SMA ($2,280) is essential for signaling trend reversal potential. Failure here maintains downward pressure.
MACD & KDJ Indicators
The MACD (12,26,9) likely resides below its signal line in negative territory, though the sharp rebound may be triggering convergence. The KDJ (9,3,3) hints at a nascent recovery signal; the K-line is tentatively crossing above the D-line from oversold territory (sub-30). This suggests short-term upward momentum is building but requires confirmation as the MACD has yet to signal a decisive bullish crossover. Watch for MACD confirmation to strengthen the reversal thesis.
Bollinger Bands
Bands widened sharply during the late-September to early-October plunge ($2,501 to $2,172), reflecting expanding volatility. Price rebounded from near the lower band ($2,172), a common oversold reaction point. The contraction that began in early October hints at potential volatility compression. A sustained move back above the middle band (20-SMA, approx. $2,300) would signal strengthening short-term momentum.
Volume-Price Relationship
Volume surged significantly during the sharp declines on October 1st (1,189,734 shares) and September 30th (928,702 shares), validating the selling pressure. The subsequent rebound on October 2nd occurred on notably lower volume (897,107 vs previous down days), introducing caution about the sustainability of the bounce. True bullish conviction needs higher volume confirmation on upward moves through resistance. Failure to see such volume increases the risk of a pullback.
Relative Strength Index (RSI)
The swift drop into early October likely drove the 14-day RSI well below 30, signaling deeply oversold conditions and laying the groundwork for the recent technical bounce. The current reading is tentatively rebounding but remains below 50 (est. mid-40s). While this alleviates immediate oversold pressure, it has not yet signaled robust bullish momentum. Further strength would see RSI breach 50. Divergence should be monitored if price makes lower lows without corresponding RSI lows.
Fibonacci Retracement
Applying a retracement to the major swing low near $1,750 (April 2025) and the recent high near $2,605 (June 2025):
38.2% retrace: ~$2,236 (near current price, acting as immediate resistance)
50.0% retrace: ~$2,178 (critical support, overlaps with $2,160-$2,172 price level)
61.8% retrace: ~$2,119
The confluence zone between the 50% retracement ($2,178) and the key price support ($2,160-$2,172) provides significant technical reinforcement. Holding this area is crucial for maintaining the uptrend structure. A breakdown below $2,160 opens the path toward the $2,000 psychological level.
Confluence & Caveats
A significant confluence of support exists near $2,160-$2,180, reinforced by the 50% Fibonacci retracement, the late-August swing low, and the recent price bounce zone. The oversold RSI reading and bullish KDJ crossover offer tentative support for the rebound. However, the low volume on the rebound day, ongoing bearish MA alignment, and price failing to reclaim key resistance ($2,280 200-SMA, $2,345) warrant caution. While the short-term setup supports a continued bounce toward $2,300-$2,345, sustained recovery requires breaking above the 200-SMA with increasing volume to negate the prevailing downtrend structure. Divergence exists between the oversold KDJ/RSI bounce signals and the lagging MACD and bearish volume profile. Traders should monitor these developments, recognizing that the primary trend remains bearish below key MAs.