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Mercadolibre (MELI) - August 8, 2023

Online auction house and ecommerce company Mercadolibre (MELI) jumped 37 spots in the SIA Nasdaq 100 Index report in the last week, including a gain of 8 positions yesterday. In doing so, it has popped up out of the red zone, driven through the yellow zone and returned to the Green Favored zone for the first time since May.

Since bottoming out in June of 2022, Mercadolibre (MELI) shares have been under accumulation, steadily advancing in a bullish Rising Channel of higher highs and higher lows. During the spring, the shares dropped back in what appears to be a normal consolidation phase. The 40-week (200-day) moving average contained the retreat and kept the underlying uptrend intact and since then the shares have been climbing again.

A major breakout is underway this week with the shares breaking out over $1,320 yesterday to signal the start of a new up-leg. Initial upside resistance appears in the $1,580 to $1,620 zone where a measured move, previous highs and a round number cluster, followed by a measured $1,840. Initial support appears near the $1,320 breakout point, then the 10-week moving average near $1.200.

A recovery trend in Mercadolibre (MELI) shares, which started in June of 2022, paused between April and July for a common consolidation. This month, the shares have started to climb once again and yesterday’s bullish Spread Triple Top breakout signaling the shares primary uptrend has resumed and a new up-leg has commenced.

Horizonal and vertical counts suggest potential upside resistance may emerge near $1,573 then $1,669 on trend. Initial support appears near $1,240 based on a 3-box reversal.

With its bullish SMAX score increasing to a perfect 10, MELI is exhibiting strength across the asset classes.

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