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.