Due to the recent activity in some of the cheaper, beaten-down Social Media stocks and ETF, as well as Research In Motion (RIMM), as shown on the Daily charts below, I'll be monitoring this group over the next days/weeks. I'll be looking for any parabolic rise and climax on high volumes on stocks such as these as a precursor to a potential major market trend reversal. If this type of stock continues to explode higher in the near-term versus value stocks, I'll also be warned of potential Q4 earnings weakness (markets favouring beta-movers versus actual value).
To illustrate what I mean, the following graph shows the decline of these stocks from the date of Facebook's IPO (FB) to this past Friday. Percent-wise, Zynga (ZNGA) and Groupon (GRPN) have been the biggest losers, followed by FB and the Social Media ETF (SOCL).
The next graph shows the level of interest in these stocks/ETF compared with the Major Indices over the past two weeks...quite a stark contrast. Whether this continues, remains to be seen.