Expect Near-Term Pullback In The 'Socials'
InTheMoneyStocks.com | Oct 29, 2014 12:13PM ET
Social-networking stocks are coming under heavy distribution. The catalyst for the decline comes after the poor market reaction to the Facebook (NASDAQ:FB) earnings, which came out Tuesday evening. In sympathy, we're also seeing weakness in Twitter (NYSE:TWTR) and LinkedIn (NYSE:LNKD).
One way traders can play the social-networking sector is by using the Global X Social Media Index (NASDAQ:SOCL). According to SOCL's weekly chart, it appears that the leading social-networking stocks are likely to trade lower in the near term. It seems that SOCL will have chart support around the $16.50 area, a level defended by the institutional money back in May. Often, old pivot areas will serve as solid support when retested.
Either way, traders should expect further pullback in the near term in the social-networking stocks.
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