Argentina's MERVAL Rises As Technicals Signal Fragile Rebound

(MENAFN- The Rio Times) The S&P MERVAL Index closed July 2, 2025, at 2,063,026.60, up 1.57% for the day, according to official market data. This marks the second consecutive day of gains and the highest close since June 24.

The index remains 27% below its January record, reflecting persistent caution among investors. Trading volumes increased modestly, with activity concentrated in financials and select consumer stocks.

The market's advance followed a period of heavy selling linked to legal and policy risks, including the ongoing dispute over Argentina 's stake in YPF and the recent hike in grain export taxes.

These factors continue to shape sentiment, as investors weigh the impact on foreign reserves and future export revenues. Top gainers in the session included Grupo Financiero Galicia and Banco Macro, which benefited from rotation into financials as investors sought stability.

Celulosa Argentina also posted strong gains, driven by renewed interest in materials stocks. On the losing side, YPF extended its decline after the U.S. court ruling, while energy peers and exporters lagged due to concerns over global demand and local policy shifts.



Benchmarking the MERVAL against regional peers, the index's 1.57% gain outpaced most Latin American markets, which traded mixed amid global uncertainty.

U.S. and European indices showed little direction, as investors awaited new signals on tariffs and monetary policy. The Argentine peso continued to weaken, reflecting ongoing capital outflows and seasonal demand for dollars.
MERVAL Shows Fragile Recovery Amid Technical Hurdles
Technical analysis of the daily chart reveals a market in transition. The MERVAL trades below its 50- and 200-day moving averages, confirming a medium-term downtrend.

The Relative Strength Index (RSI) stands at 44.9, indicating the market is recovering from oversold conditions but remains far from overbought territory.

The Moving Average Convergence Divergence (MACD) remains negative but shows signs of flattening, suggesting that selling pressure may be easing. Bollinger Bands have narrowed, pointing to reduced volatility after a period of sharp swings.

The four-hour chart supports the view of a short-term rebound. The index has moved above the lower Bollinger Band and is testing the 20-period moving average.

The MACD histogram has turned positive, and the RSI has climbed to 49.5, signaling improving momentum. However, resistance at the 2,169,030 level remains firm, and the market must clear this barrier to confirm a sustained reversal.

ETF flows into Argentine equities have stabilized after strong inflows earlier in the year. The Global X MSCI Argentina ETF, which tracks the local market, has seen no significant net movement in recent days, reflecting investor caution.

The MERVAL's advance signals tentative optimism, but the market's direction remains tied to legal outcomes, policy clarity, and global risk appetite. Technical indicators suggest a fragile recovery, with key resistance levels and macro risks still in play.

MENAFN03072025007421016031ID1109755719