5 Hot Stocks Vulnerable to Steep Declines

Shares of Twitter Inc. (TWTR), Netflix Inc. (NFLX), Chipotle Mexican Grill Inc. (CMG), Under Armour Inc. (UAA) and TripAdvisor Inc. (TRIP) are among some of the best performing U.S. equities in 2018, even as the market experiences a level of volatility not seen in years. In light of their recent run, however, this handful of high-flying stocks could experience major resistance as they soar far beyond analysts' consensus price targets. According to several investors, as outlined in recent CNBC story, these five consumer and technology stocks are particularly vulnerable to major pullbacks. 

Silicon Valley media disrupter Netflix, the second-best performer in the S&P 500 this year, has gained 103% year-to-date (YTD), compared to the S&P 500's 3.8% increase in 2018, bringing it to trade roughly 15% above the Street's consensus target. Jack Dorsey's Twitter, the newest S&P 500 member, is up 92% YTD, reflecting a near 45% premium above its average price target. TripAdvisor shares have increased 72% over the same period, at a 25% premium, while Chipotle, up 62%, trades at an approximate 20% premium, and Under Armour, up 62%, trades 45% above the consensus price target. 

Under Armour's Run Heading to Exhaustion 

"One from the list that stands out to lighten up on is Under Armour," said Ari Wald, head of technical analysis at Oppenheimer, in an interview with CNBC's "Trading Nation." He views the stock, which trades about 45% above its average price target, coming into the most amount of resistance, drawing a "formidable resistance range" from about $24 to $28. Wald indicated that the bearish gap was formed when shares of the athletic apparel and footwear company sank nearly 30% in January 2017 on disappointing quarterly results and a shake up of its management team. While fears of new competition from Nike Inc. (NKE) and revived German sneaker rival Adidas AG (ADDYY) dragged down shares of UAA over the recent years, new products, a focus on cost cutting and growth in international markets, have lifted investor sentiment. 

Susquehanna echoed Oppenheimer's bearish outlook on Under Armour. Analyst Stacey Gilbert reiterated the firm's negative rating on UAA and an $11 price target, reflecting a 53% downside from Monday as shares closed higher 0.4% at $23.31. Gilbert doubts that the Baltimore-based company will meet 2018 consensus estimates, while arguing that guidance for next year is too high. As a result, the stock should see its multiple retract from its current extension, she said. 

(See also: Under Armour to Jump on Intl. Sales: Deutsche Bank.)

Hopes of Revival at Tech Cos, Burrito Chain Are Overblown, Too Much Netflix Hype

Social media giant Twitter has experienced a similar revival as bulls on the Street cite better prospects for ad sales, improving user growth and strategic partnerships such as live sports streaming. Twitter has failed to regain levels reach in 2013 as its stock took a tumble on concerns over lack of quality control on its global platform and new competition from platforms like Facebook Inc.'s (FB) Instagram and Snap Inc.'s (SNAP) Snapchat. 

(See also: Twitter Jumps, Morgan Stanley Upgrades on Ad Sales.)

Twitter closed up 0.4% on Monday. Netflix, which has skyrocketed on a series of better-than-expected results for user growth in the recent quarters, fell 0.4%. Travel review site TripAdvisor, beaten down in recent years by fears of new entrants like sharing economy unicorn Airbnb, has been applauded for its use of data and its position in the high growth global tourism industry. TRIP gained 1.3% on Monday. Denver-based burrito chain Chipotle was up 1.4% at close.