Social Media ETF Nears Year-End Breakout

December 24th at 6:30am by Tom Lydon

It is already one of this year’s top-performing industry exchange traded funds, but the Global X Social Media Index ETF (NasdaqGS: SOCL) could add to its 59% year-to-date and do so before 2014 arrives.

“The price action since Dec. 11 appears to be forming a handle. A handle is a tight range that is at least one week in length (can be several weeks or more) that develops usually 5% to 10% off a base high,” writes Deron Wagner of Morpheus Trading Group regarding SOCL.

“The current handle in $SOCL is eight days in length. Look for a breakout above the high of Dec. 10 to confirm the pattern,” added Wagner.

SOCL has surged this year, buoyed in large part by the resurgence in shares of Facebook (NasdaqGM: FB) and euphoria surrounding Twitter’s (NYSE: TWTR) initial public offering. Although SOCL was one of the first ETFs to add Twitter to its lineup, the ETF slumped more than 10% from Oct. 18 through Nov. 12 as investors became increasingly concern about the frothy valuations being sported by Internet and social media names. [Waning Enthusiasm for Social Media Stocks]

SOCL has since reclaimed all of those losses and then some. The fund gained 2% on Monday to close at a new all-time high and is up 10.1% in just the past month.

Facebook and Twitter combine for 16.5% of SOCL’s weight with Mark Zuckerberg’s company being the ETF’s largest holding at 10.6%. LinkedIn (NYSE: LNKD), Sina (NasdaqGM: SINA), Yandex (NasdaqGM: YNDX) and Google (NasdaqGM: GOOG) are also among SOCL’s top-10 holdings, a group that represents roughly 63% of the fund’s weight.

SOCL has hauled in $91.6 million of its $113.6 million in assets under management this year. The fund celebrated its second anniversary in November.

Global X Social Media Index ETF

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Facebook and Google.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Tickers

SOCL