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Gains Above 50 DMA Line Follow Recent Distributional Action
Friday, May 28, 2010   CANSLIM.net
 

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.

About : Kenneth J. Gruneisen - Passed the CAN SLIMĀ® Master's Exam
Kenneth J. Gruneisen started out as a licensed stockbroker in August 1987, a couple of months prior to the historic stock market crash that took the Dow Jones Industrial Average down -22.6% in a single day. He has published daily fact-based fundamental and technical analysis on high-ranked stocks online for two decades. Through FACTBASEDINVESTING.COM, Kenneth provides educational articles, news, market commentary, and other information regarding proven investment systems that work in good times and bad.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.
You can contact Kenneth J. Gruneisen - Passed the CAN SLIMĀ® Master's Exam at kengruneisen@gmail.com

 
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Kenneth J. Gruneisen founded Gruneisen Growth Corp. (2003), which prior to May 11, 2015, operated CANSLIM.net and CANSLIM.com both under license from Data Analysis Inc. / Investor's Business Daily. Kenneth has passed the CAN SLIM® Master's Exam. Gruneisen Growth Corp. now continues over two decades of fact based market analysis via FactBasedInvesting.com.

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