MELI slides nearly 10% as sellers dominate amid Brazil-driven volatility

Traders Union
All News
Stocks
MercadoLibre slides 9.77% today on Brazil concerns

Highlights

Shares of MercadoLibre fell sharply as Lula da Silva's re-election triggered concerns over Brazil's fiscal outlook and currency risk.
Equities across Brazil and Latin America saw broader selling, with MercadoLibre identified as a key stock under pressure.
The stock trades below key moving averages with support at $1,583 and resistance at $1,794, with a 70% probability of further downside over the next five trading days.

Investor retreat widens as Brazil’s fiscal and currency risks mount

MercadoLibre experienced a significant decline following political and macroeconomic developments in Brazil after the re-election of President Luiz Inácio Lula da Silva. Investor concerns focused on Brazil's fiscal policies, interest rates, and currency outlook, which prompted a wider retreat in Brazilian and Latin American equities. MercadoLibre was identified as a leading stock under pressure amid these developments.

Anton Kharitonov, expert at Traders Union, sees MercadoLibre’s technical structure breaking down after the sharp 9.77% decline. He highlights price action below all major moving averages and mounting pressure from sellers. Kharitonov is cautious due to the adverse sentiment triggered by Brazil’s macroeconomic turmoil and the lack of clear bullish confirmation from key indicators. He adds that mixed momentum and an oversold Stochastic RSI do not guarantee a rebound in the near term. "I believe that until major resistance is reclaimed and macro risks abate, the downside bias remains pronounced for MercadoLibre."

Viktoras Karapetjanc, expert at Traders Union, views the recent volatility as a potential opportunity for investors watching MercadoLibre. He notes that despite political headwinds from Brazil, the company remains a dominant player in Latin American digital commerce. Karapetjanc maintains that oversold technicals could attract buyers if momentum turns. He sees the underlying bullish structure as intact if the $1,583 floor holds. "With regional risks priced in, I expect MercadoLibre to rebound if buyers defend support and sentiment quickly recovers."

Sholanke Dele, market strategist, takes a skeptical stance amid MercadoLibre’s steep decline. He points to uncertainty from Brazil’s political scene and fiscal worries driving immediate investor flight. Dele questions the reliability of single bullish signals like the MACD while most technicals flash caution. "In this environment, I see little incentive for risk until the macro backdrop stabilizes and selling exhausts itself."

Decisive selling dominates as mixed momentum counters resistance levels

MercadoLibre is trading below the 20-day ($1,819), 50-day ($1,859), and 200-day ($1,825) moving averages, signaling broad pressure from sellers across all timeframes. The nearest ceiling is at $1,794 and the nearest floor is at $1,583, with the Ichimoku Kijun ($1,796) confirming resistance well above the current price. Momentum signals are mixed: the MACD shows a strong buy signal, yet the Average Directional Index (ADX) indicates a neutral trend. The Relative Strength Index (RSI) at 45.95 suggests a sell signal, and the Stochastic RSI shows the stock is oversold at 0. Commodity Channel Index (CCI) is neutral. Bull/Bear Power (BBP) at -13.8 confirms sellers dominate intraday momentum, with its oversold signal adding to the downward bias. The stock is trading at $1,631, down $176.735 or 9.77% after a downside gap of about 0.41%. It is currently trading near the daily low, with intraday volatility at 1.65%. Pressure after the open aligns with the dominance of sellers and the oversold backdrop, despite the bullish MACD.

Earlier, analysts noted that MercadoLibre faced heightened downside risk due to seller dominance and the inability to reclaim technical resistance levels, despite strong sales growth in core markets. The latest decline, deepened by renewed macroeconomic concerns in Brazil, reinforces the negative bias and puts a spotlight on $1,583 as a critical support level to monitor in the days ahead.

Source of Data: MELI Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.