Mercadolibre (MELI) Surges 3.28% on Institutional Buying Frenzy: Is This the Start of a Bullish Rally?

Summary
• Institutional investors, including Michael Burry’s Scion Asset Management, poured $7.84 billion into MELI
• Q2 revenue surged 34% to $6.8 billion, outpacing expectations
• Stock traded between $2,342.32 and $2,432.61, closing at $2,395.90

Shares of Mercadolibre (MELI) are surging on a wave of institutional buying and strong earnings momentum. The stock’s 3.28% intraday gain reflects renewed confidence in the e-commerce giant’s growth trajectory, driven by a $7.84 billion stake from Michael Burry’s Scion and a 34% revenue surge in Q2. With the stock nearing its 52-week high, traders are weighing whether this rally is a breakout or a correction.

Institutional Capital Ignites MELI's Bull Run
Mercadolibre’s sharp intraday rally was catalyzed by a coordinated institutional buying spree. Scion Asset Management’s $7.84 billion stake, coupled with GQG Partners’ 23.5% position increase and Ground Swell Capital’s new $439,000 investment, signaled robust confidence in the company’s long-term potential. This institutional stampede coincided with Q2 results showing a 34% year-over-year revenue jump to $6.8 billion, despite a bottom-line miss due to credit portfolio expansion. The market appears to value the company’s strategic shift toward higher-quality customers and its expanding wallet share, even as near-term margins face pressure.

Internet Retail Sector Mixed as MELI Outperforms
While MELI surged, the broader internet retail sector showed mixed momentum. Amazon (AMZN) dipped 0.16%, and Sea Limited (SE) rose 1.87%, reflecting divergent investor sentiment. MELI’s outperformance highlights its unique position in Latin America’s e-commerce boom, where its fintech and logistics infrastructure are creating network effects. However, the sector’s volatility—exacerbated by macroeconomic uncertainty—means MELI’s rally could face headwinds if broader consumer spending trends weaken.

Leveraged ETF and Options Playbook for MELI’s Momentum
• 200-day average: $2,141.92 (well below current price)
• RSI: 44.11 (oversold territory)
• MACD: -27.30 (bearish divergence)
• Bollinger Bands: $2,298.92 (lower band) to $2,430.59 (upper band)

MELI’s technicals suggest a short-term consolidation phase after its sharp rally. The stock is trading above its 30-day moving average ($2,386.00) but remains 14% below its 52-week high of $2,645.22. A breakout above the $2,430.59 Bollinger upper band could trigger a retest of key resistance at $2,432.61 (intraday high).

Top Options Plays:
• MELI20250822C2377.5
- Strike: $2,377.50 | Expiration: 2025-08-22 | IV: 6.50% | Leverage: 103.73% | Delta: 0.8191 | Theta: -10.78 | Gamma: 0.0114 | Turnover: 0
- Why: High leverage and delta position this call to capitalize on a continuation of MELI’s bullish momentum. The 103.73% leverage amplifies gains if the stock holds above $2,377.50.
- Payoff: At a 5% upside (target $2,515.70), intrinsic value = $138.20 per contract.

• MELI20250822C2382.5
- Strike: $2,382.50 | Expiration: 2025-08-22 | IV: 9.04% | Leverage: 107.93% | Delta: 0.6921 | Theta: -9.48 | Gamma: 0.0110 | Turnover: 0
- Why: Moderate delta and high leverage make this contract ideal for a balanced bet on MELI’s near-term volatility. The 9.04% IV suggests market anticipation of further price swings.
- Payoff: At $2,515.70, intrinsic value = $133.20 per contract.

ETF Angle: The KraneShares 2x Long MELI Daily ETF (KMLI) surged 5.34% alongside MELI’s rally. Traders bullish on MELI’s long-term narrative may consider KMLI for leveraged exposure, though daily rebalancing risks should be monitored.

Action: Aggressive bulls may consider MELI20250822C2377.5 into a breakout above $2,430.59. Conservative traders should watch for a pullback to the $2,349.76 support level before initiating longs.

Backtest Mercadolibre Stock Performance
After a 3% intraday surge, MELI has historically shown positive short-to-medium-term gains. The 3-day win rate is 52.46%, with an average return of 0.57%. The 10-day win rate is 55.08%, with an average return of 1.12%. The 30-day win rate is 56.31%, with an average return of 2.68%. The maximum return during the backtest was 5.75%, which occurred on day 59 after the surge.

MELI’s Rally Faces Crucial Juncture: Act Now or Miss the Wave
Mercadolibre’s 3.28% surge reflects a confluence of institutional confidence and strong earnings momentum, but technical indicators suggest a potential consolidation phase. The stock’s proximity to its 52-week high and the sector’s mixed performance mean traders must act decisively. A breakout above $2,430.59 could validate the bullish case, while a breakdown below $2,349.76 would signal caution. With the KraneShares 2x Long MELI Daily ETF (KMLI) up 5.34% and Amazon (AMZN) down 0.16%, MELI’s outperformance underscores its unique position in the e-commerce landscape. Watch for $2,430.59 breakout or a pullback to $2,349.76—either could define the next phase of this rally.