The Chartist Eyes E-Commerce

11/18/2020 5:00 am EST


Dan Sullivan

Editor, The Chartist

Time and time again we have seen the market stay in an overbought mode for a considerable period of time, explains technical expert Dan Sullivan, editor of the industry leading advisory service, The Chartist.

Our advice for investors who are acting in sync with our real money accounts is to stay fully invested. Here are two stocks that rank highly in our relative strength ratings.

Since its March lows, Trade Desk (TTD) has been in a strong uptrend with pullbacks being very limited in scope. During that time (3/30 – 11/2), it rallied 410%. It trades well above its 50 and 200-day lines.

Headquartered in Ventura, California, the company provides a self-service, cloud-based platform that allows buyers to create, manage and optimize data-driven digital advertising campaigns across various advertising services.

Formats include display, video, audio, native and social delivered on multiple devices such as computers, mobile and smart TVs.

The stock jumped 26.6% on November 6 after it posted third-quarter earnings well above estimates. Earnings rose 41% to $1.27 per share, while revenue increased 32% to $216.1 million from a year ago. Analysts expected earnings of only 43 cents a share on revenue of $180.8 million.

MercadoLibre (MELI) has been in a strong uptrend rising 232% from its April 1, closing low at 447.34 to its all-time high on November 6 at 1,485. Since then it has come under some selling pressure, declining 13%.

The pullback occurred as the promise of an effective Covid-19 vaccine caused the rotation from the market leaders, which have been heavily techs, to more cyclical issues. It is 12% off its 52-week high. The stock, however, remains comfortably above its up trending 50- and 200-day lines.

The company operates the largest online and payments ecosystem in Latin America with approximately 174.2 million users, it is the region’s most popular e-commerce site.

The company integrates across several services including the MercadoLibre Marketplace, payments solution, advertising, and shipping. Third-quarter earnings blew past estimates.

Net revenue surged 85% year-over-year to $1.12 billion. Net income rose to $15 million or .28 cents per share versus a loss of 97 cents in the year ago quarter.

The consensus estimates were for revenue of $972 million and earnings of .17 cents. Unique active users jumped 92.2% to a total of 76.1 million, while gross merchandise volume (GMV) rose to $5.9 billion on an increase of 62.1% in U.S. dollars and 117.1% in local currency.

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