Seeking Alpha

Gabe Varga's  Instablog

Gabe Varga
Send Message
Gabe Varga, CMT, is the founder and president of Axiomix, Inc., an investment research firm that provides technical analysis and algorithmic asset allocation models for mutual fund and ETF investors. is a market research tool that was developed by Gabe for tracking the sector... More
My company:
Axiomix, Inc.
My blog:
ETFnext: Sector Rotation
  • Sector Rotation: Bull Trap For Social Media ETF 0 comments
    Jan 29, 2014 6:27 PM | about stocks: SOCL, TWTR, LNKD, FB, TCEHY, SINA

    Following the highly publicized Twitter IPO on November 7 last year the Global X Social Media Index Fund (NASDAQ:SOCL) became one of the hottest ETFs. SOCL is an attractive way to play the social media space for investors looking to diversify in Facebook, Tencent, LinkedIn, SINA and Twitter.

    In my previous blogs I highlighted that SOCL broke out to new 52-week highs in late December on decreasing volume, which is always a cautionary sign:

    The momentum stalled in the second week on January and, as the broader stock market sold-off starting last week, SOCL was not able to hold its long-term trendline. Furthermore, SOCL sold-off on increasing volume in the last few days, which will make me very suspicious of a potential snap-back rally.

    While social media stocks can become attractive investments again in the future, I would look for investment opportunities elsewhere in this quarter, unless I can see again the volume supporting the price movement for SOCL.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Back To Gabe Varga's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.