Twitter is surging.
The stock rose more than 10% in early trading Tuesday after beating earnings and topping sales estimates for its first quarter. That move also pushed Twitter out of bear market territory, now less than 20% off its 52-week high.
Matt Maley, equity strategist at Miller Tabak, said that Twitter still looks like the social stock with the most upside even with Tuesday's surge.
Facebook has added nearly 40% this year, while Snap has rocketed 117% higher, compared with Twitter's 35% gain.
Twitter has "been stuck in a sideways range for six months now and you really have to go back to June before it was really rallying in any significant way," Maley said Monday on CNBC's "Trading Nation."
Twitter had ping-ponged in a tight range between roughly $26 and $35. It had not traded above that level since mid-2018 until Tuesday when it broke out above $38.
It now needs to hold that level through to the close, said Maley.
"If it can hold above that range ($36.25 is the top of that range on a closing basis), it's going to be quite positive," Maley said in an email on Tuesday. "It hasn't attracted any 'momentum money' for 10 months. If it continues to break above that range over the coming days, it's going to attract some of that momentum money (much like FB did after they reported their 4th quarter earnings)."
Twitter led the XLC communications services sector ETF higher Tuesday. The ETF has added 20% in 2019, outpacing the 16% gain of the S&P 500.
However, Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, says to steer clear of the group.
"We would avoid this altogether," Morganlander said on "Trading Nation" on Monday. "In fact, because of the concentration risk about 40% of this sector is based off of two companies and the other top 10, it's basically 70%."
"Our viewpoint is that the social media companies as well as some of the search companies are stretched at this inflection point," said Morganlander.