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NEW YORK ( TheStreet) -- Southwest Airlines  (LUV) - Get Southwest Airlines Co. Reporttook a major beating on Wednesday. The regional airliner lost over 9% on its heaviest downside volume since mid-2011.

News of the company's plan to boost its capacity earned the airliner a downgrade from Buckingham. Investors reacted very negatively to the report, pushing LUV to a gap-lower open. The pressure remained on all session as the stock plunged below its 200-day moving average for the first time since late 2012. 

The damage was widespread throughout the sector. Major airlines such as American  (AAL) - Get American Airlines Group, Inc. Report, Delta (DAL) - Get Delta Air Lines, Inc. Report and United  (UAL) - Get United Airlines Holdings, Inc. Report were under heavy distribution as well. UAL was the hardest-hit, losing over 10% on over four times its average trade.

Here's what The Street's Jim Cramer had to say Thursday about the sector: "Any group can rally, but after speaking with (CEO) Doug Parker from AAL, I have to be concerned that all of the estimates are too high and they have to come down, which is not an ideal environment to invest."

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For Southwest bulls, it may pay to remain patient before putting money to work. The stock has been working through a narrowing consolidation pattern since late January. Following Wednesday's collapse, this formation now looks fairly ominous. The momentum unleashed will likely take some time to wear off.

A key level to watch is near $35.50. LUV topped here just before the October 2014 flush. The powerful rally that followed, which carried the stock over 65% higher by late January, received a major spark once this level cleared on Nov. 4. If the stock can base near this key zone, a recovery move may take hold.

Southwest is one of the top 10 companies in the S&P 500 expected to have the biggest earnings growth this year, according to S&P Capital IQ. Click here to read more.

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At the time of publication, Morrow had no positions in the stocks mentioned.