Mercadolibre Inc. (MELI +$0.41 or +0.80% to $51.87) posted a 4th consecutive gain, rallying further above its 50-day moving average (DMA) line and finishing the week only -7% off its 52-week high. Its 200 DMA and recent lows define important near-term chart support.  Market conditions (M criteria) remain doubtful until a follow-through day from at least one of the major averages confirms that sufficient institutional buying conviction has returned.

When it was last shown in this FSU section on 5/13/10 under the headline "Put Latin-American Internet - eCommerce Firm On Watch List an annotated graph showed its negative reversal for a loss on higher volume, an indication it was encountering distributional pressure while challenging previously stubborn resistance. The Latin American Internet - eCommerce firm was featured in yellow in the 5/13/10 mid-day report (read here) and noted as it traded within 5 cents of its 52-week high. It has found great support at its long-term 200-day moving average (DMA) line, including earlier in the year. The high-ranked leader's pivot point is based upon its 12/28/09 high plus ten cents. Top-rated funds owning an interest rose from 62 in Dec '08 to 101 in Mar '10, which is encouraging concerning the I criteria. Its strong quarterly earnings and annual earnings history satisfy the C and A criteria.  Disciplined investors will watch for a proper technical buy signal.  It is an ideal candidate for one's watch list while awaiting the new rally effort's confirmation in the form of a sound follow-through day of gains from at least one of the major averages on higher volume.