These stocks were the most stretched heading into the sell-off


These stocks were the most stretched heading into the sell-off

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(This story is for CNBC Pro subscribers only.) The S & P 500 slumped for a third straight day Thursday on rising fears of a second wave of the virus, weighed by a sharp pullback among


the reopening trades. From a technical perspective, the reversal was bound to happen as the rally in many names had gone too far, too fast. Here are the 20 S & P 500 stocks looking the


most frothy heading into the big sell-off Thursday, based on their distance above their 50-day moving average. The stocks that have stretched the most from their 50-day moving average


through Wednesday include many airlines and cruise lines names, according to Finviz.com . Moving averages are widely-used trading signals that determines a stock's support and


resistance levels and predict the trend direction. When stocks untether from these moving averages, it can be a sign they have moved too far, too fast. Royal Caribbean Cruises has jumped a


whopping 185% from its 52-week low, pushing the stock nearly 30% average price of the last 50 days. Carnival and Norwegian Cruise Line have also surged to more than 20% above their trend


lines. These names fell at least 8% each in morning trading Thursday, leading the selloff. American Airlines also bounced nearly 80% from its recent low through Wednesday, sitting almost 30%


above the trend line. Boeing shares were also overbought from a technical standpoint. Travel companies bore the brunt of the selling on Thursday as worries about a second wave of


coronavirus cases rose with several areas of the country reporting spikes following the reopening of their economies. Medical supply company Abiomed might have also rallied to0 far in recent


days. The stock has soared more than 100% from its recent low, boosted by a new acquisition of Breethe, which makes an oxygenation system. PayPal and eBay were also coming off an overdone


rally, blowing past their 50-day moving averages. The duo have been among the top gainers in the Nasdaq Composite, powering the tech-heavy benchmark's epic rally to 10,000. Other


overstreched stocks ahead of the pullback include Autodesk , ViacomCBS , United Rentals and Cintas.