MercadoLibre, Inc. : Anticipation of a bearish reversal
Entry price | Target | Stop-loss | Potential |
---|
US$113.44 |
US$0 |
US$118.9 |
+100% |
---|
Mercadolibre Inc should undergo some profit-taking after the rebound in recent sessions.
From a fundamental viewpoint the company appear overvalued. P/E Ratio for the current year is at 41x and expected at 33.4x for next year. With a valuation ratio of 6.75x, the group appears overvalued compared to its business activity.
Graphically, the stock went through a period of rebound in recent trading sessions towards the USD 115.6 short-term resistance. The share should consolidate near this area. It could act as a stopping point of the upward movement. This scenario suggests a return to the USD 97.5 support area which will be a bearish objective.
The graphical configuration argues to establish a short trade at the current price. The end of the technical rebound, the consolidation phase and overbought situation: Mercadolibre has all the characteristics for a short selling. The first objective will be fixed near the USD 97.55 short term support. This strategy should be protected by a stop loss above USD 115.6.
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Surperformance is Buy on MERCADOLIBRE, INC. since 2024-02-16
.