The stock market has been under pressure over the last few weeks as momentum favorites in big tech and biotech have rolled over badly … and airline stocks such as American Airlines (AAL), United Continental (UAL) and Southwest Airlines (LUV) are no exception.
It has been a big reversal of fortune for these stocks — carried merely by their popularity, as ridiculous price-to-earnings multiples brings back memories of the dot-com bubble — which have helped keep the Nasdaq-100 above its 20-week moving average since late 2012.
But it’s all coming apart now as investors realize the game is up. What started in stocks like Amazon (AMZN) and Facebook (FB) is now spreading to other areas where persistent momentum has led to complacency. That includes airline stocks, which have been on a tear over the last three years. Delta Air Lines (DAL) has more than tripled.
Here are three airline stocks that are hitting turbulence — making them attractive short-side opportunities as the bulls are forced to take profits.