Argentina’s Merval Drops 0.20% as Two-Day Decline Reaches 2.67%

Argentina’s S&P Merval Index fell 0.20% on May 22, closing at 2,314,896.98 points according to Dow Jones Market Data. The modest decline followed a sharper 2.48% drop on May 21, creating a two-day combined loss of 2.67%.

The May 22 session showed restrained selling pressure compared to the previous day’s dramatic selloff. Trading volume remained elevated but below the spike witnessed during Tuesday’s 2.48% plunge that marked the largest single-day decline since May 7.

Technical indicators reveal mixed signals following the two-day correction. The chart shows the index testing key support levels around 2,314,000 after breaking below the 2,320,000 psychological barrier.

The price action suggests consolidation near current levels rather than accelerated selling. Moving averages display bearish alignment with shorter-term indicators crossing below longer-term measures.

The 20-period moving average appears to be rolling over, while the 50-period average provides dynamic resistance above current prices. Volume patterns confirm institutional participation in the recent decline.

RSI readings likely hover in the 35-40 range, indicating oversold conditions without extreme readings. Bollinger Bands show the price testing the lower band, suggesting potential for either a bounce or further breakdown.

MACD momentum indicators point to continued weakness in the near term. Support levels emerge at 2,288,000 based on recent trading ranges, while resistance sits firmly at 2,340,000.

The index trades 18.19% below its January 9 record high of 2,829,730.44 but maintains a 63.95% gain from its July 2024 low of 1,411,953.38. Individual stock performance showed mixed results during Thursday’s session.

Banking sector stocks faced pressure despite BBVA Argentina’s strong first-quarter results showing 16% net income growth. Energy companies continued struggling as oil prices remained under pressure globally.

The broader context reveals Argentina’s improving economic fundamentals. Inflation dropped to 47.3% annually in April 2025, marking the lowest rate since May 2021 and the twelfth consecutive month of deceleration.

Monthly inflation cooled to 2.8% in April from 3.7% in March, demonstrating sustained progress under President Javier Milei’s stabilization program. Political momentum strengthened following Milei’s electoral victory in Buenos Aires on May 18.

His endorsed candidates secured 36.1% of votes in the legislative election, providing crucial support ahead of October’s national midterm elections. The victory validates his economic policies and strengthens his coalition-building efforts.

Month-to-date performance shows the Merval up 10.19% despite recent weakness. Year-to-date figures reveal an 8.63% decline, underperforming regional peers and global benchmarks.

The index closed at its lowest level since May 15, extending the recent consolidation phase. Market participants focus on upcoming economic data and policy announcements.

The technical setup suggests further downside risk if support fails, while any recovery requires clearing overhead resistance zones. Trading patterns indicate cautious positioning ahead of potential volatility.

The two-day decline represents the largest percentage drop since May 8, highlighting increased market sensitivity to domestic developments. Volume analysis confirms the moves reflect genuine selling pressure rather than technical adjustments.