Technical analysis has many applications and uses, but here are the most important ones. Assessing where a stock is trading in relation to its 52-week high can serve as a leading indicator of the market outlook for that company or industry group, and a 20% discount level is one of the most important criteria in this analysis. Wall Street refers to this as the difference between a bull market and a bear market, and here are three stocks that are trading well in bear market territory.
Mercado Libre Company Nasdaq: Milli, Rocket company New York Stock Exchange: RKTand Ali Holding New York: No It is now trading under this bear market label. Since these stocks are exposed to the consumer discretionary sector, they may have fallen due to correlation and not due to any company-specific issue. However, in both cases, investors need to focus on two key factors moving forward.
The first question is whether they have already taken into account fears of a slowdown in consumption due to fears of inflation and tariffs. The second question is whether there is enough evidence to support a price increase for their business models by the end of Q4 2025. Each with a different business model and mix of products and services, this approach offers a great way to capitalize on a portfolio’s diverse upside potential.
The bottom of the MercadoLibre sent the bears running
Mercadolibre today
As of 10/24/2025 at 04:00 PM ET
- 52 week range
- $1,646.00
▼
$2,645.22
- P/E ratio
- 53.37
- Price target
- $2,799.12
Over the past month, short interest in MercadoLibre shares has fallen 13.8% as a potential sign of bearish capitulation, which is one reason why short sellers are exploiting and closing out their positions right now. The Latin American e-commerce platform has had a year-to-date performance of 23.6% year to date, enough to create an important inflection point.
With the company now trading at 79% of its 52-week high, it is close enough to cross into bullish momentum, but far enough away from its yearly highs to give potential buyers room to capitalize on further upside moves. With this attractive risk-reward ratio in mind, investors shouldn’t be surprised to see where Wall Street analysts think MercadoLibre could head next.
The consensus price target remains set at $2,810.88 per share, which represents an upside of 33.7% from the current share price. However, there are also some extreme opinions on this topic. The most recent, in October 2025, came from Susquehanna’s James Friedman, who had a price target of $2,900 per share (although that was reduced from the previous price of $2,975).
Here’s more concrete evidence of MercadoLibre’s bullish optimism: Swedbank also took action in October by raising its positions by 11.9%, bringing its total stake to $321.5 million today. At this point, it seems like most consumer concerns are exaggerated by the stock’s decline, but that’s why the fourth quarter will be key for MercadoLibre.
The MarketBeat consensus is set at $13.79 in earnings per share (EPS), which would show a 34% jump from $10.31 in EPS today, which is exactly why optimism for this name is high through the end of the year.
The missile strike no longer has legs
Rocket companies today
Rocket companies
- 52 week range
- $10.06
▼
$22.56
- Price target
- $17.12
With some US housing indicators, e.g Loss of building permits With the backlog of home listings showing bearish signs, it was not surprising to see mortgage stocks like Rocket Companies fall to 76% from their 52-week high. However, this price is close to the basement level, given today’s industry indicators.
In many ways, this is also a great risk-versus-reward play for investors, especially since BTIG Research’s Eric Hagen now expects this stock to trade at $25 per share with his Buy rating. This call is bold, as it stands above the consensus price target of $17.12 per share; However, there are several reasons why this is a plausible reason.
Mortgage rates could decline as the Federal Reserve lowers interest rates further this year, which could attract new homebuyers to the backlog of listings the industry currently has. The fourth quarter is crucial for Rocket Companies, not just because of these interest rate cuts, but because of where earnings per share are set to head.
The MarketBeat consensus calls for 12 cents in EPS for the fourth quarter, nearly three times today’s earnings of 4 cents. This growth is likely not being reflected in the share price, especially given how low it is trading today, providing investors with a real opportunity to capitalize on this rally.
Tariffs have been overstated for a decade
today
- 52 week range
- $34.59
▼
$64.05
- P/E ratio
- 92.72
- Price target
- $63.10
Because On Holding has significant exposure to China, both as a customer and a supplier, markets have justified the sell-off as part of the tariff exposure thesis. The result is that this stock is now trading at 65% of its 52-week high, which represents bear market territory, and also gives investors a high probability of unpriced earnings growth.
With the consensus price target still set at $63.65, calling for a 53.5% upside potential, this view may be more than just a view today. The markets are fully on board with this upside potential, assigning a price-to-earnings ratio of 92.2 times to the stock, a massive premium above the retail sector average of 18.8 times.
This premium can be justified by the market’s confidence in On Holding’s brand strength, growth trajectory, and exposure to global consumer trends. If the company delivers strong Q4 results and continues to gain momentum, that could help close the valuation gap and support further upside in the stock.
Before you consider MercadoLibre, you’ll want to hear this.
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While MercadoLibre currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View the five stocks here
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