Mercadolibre May Be Poised For A Breakout
Mercadolibre (Symbol: MELI), the leading Latin American e-commerce provider, may be poised for yet another break upward. As you can see below, shares hit some resistance at around $54, pulling back to $48 before surging back towards $54.
Shares formed a similar patter from 10/26 – 11/4. There, shares gapped out of the pattern on high volume, beginning an uptrend from $40 up to the aforementioned $54-mark.
Obviously, a gap here would be nice, as that would almost certainly indicate some near-term strength. But we don’t necessarily need a gap. Even a bit of a pullback from here would not be so bad. If shares could pull back to about $52 before resuming an uptrend, we would have a bread and butter cup-and-handle pattern, albeit over a small number of trading days. Those patterns, if breaking upward, are among the most profitable patterns in existence. So, be on the watch, because if past is indeed prologue, a breakout above $54 should be able to net you at least a 15-20% gain.
Disclosure: No positions in MELI.
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