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Death of High Fliers?

When playing momo stocks, the Fast pros always say buy high and sell higher until you get a sign that suggests otherwise. We may have just gotten that sign.

On Tuesday some of the year’s highest fliers such as Chipotle, Salesforce and Ralph Lauren all took a hit.

Although they traded lower as the market sold off broadly, the pros find that somewhat surprising because they would have expected some investors to buy the dips, betting the momentum continues.

“That’s hardly bullish,” says trader Dan Nathan. Also he adds, these and other high fliers are starting to break key technical levels. "In times of uncertainty people watch the technicals," he adds, "and when they break down, investors sell."

“And we’re in the beginning of May,” he adds. “For the past two years it’s been a rocky period,” he says. Nathan sees no reason for this year to be different.

All told, Nathan sees high fliers as a crowded trade.

Trader Stephen Weiss says much the same. “I'd be particularly cautious of any momo stock with big Europe exposure. And historically there is not safety in these kinds of stocks.”

As a value investor, trader Karen Finerman can’t understand why investors were in these stocks in the first place. “How can anyone justify their valuations? There are better places to put money to work.”

* You can find our conversation about momentum stocks about 6 minutes into this video



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Trader disclosure: On May 8, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is short AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is long AVP; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDX; Brian Kelly is long WFC; Brian Kelly is long T; Brian Kelly is long VZ; Brian Kelly is long ADM; Brian Kelly is long USG; Brian Kelly is short KRONE; Brian Kelly is short FTSE 100 Futures; Dan Nathan is long jan 450 puts AAPL; Dan Nathan is long BAC MAY 7 PUTS; Dan Nathan is long C JULY 32/27 PUT SPREADS; Dan Nathan is long MS MAY 16/15/12 PUT FLY; Dan Nathan is long IBM JULY 200/185 PUT SPREADS; Dan Nathan is long RIM JAN 20/25 CALL SPREAD; Stephen Weiss is short MT; Stephen Weiss is short CMI; Stephen Weiss is short JCP; Stephen Weiss is short NFLX; Stephen Weiss is long AIG; Stephen Weiss is long JPM; Stephen Weiss is long QCOM

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