The Panic Trade

After the bombings in Brussels on Tuesday morning, many stocks had panic sell-offs. I DO NOT LIKE profiting on the downside in awful event, but I don’t mind buying after sharp moves down.

Priceline (PCLN) was an example of stock that could be bought after the opening.

Many travel-related stocks looked sharply lower pre-market. How do I know that? Go to a watchlist on TOS (ThinkorSwim) , and add 2 fields…MARK and MARK CHANGE. This way I see how stocks are reacting to “events.” I had a watchlist called travel that includes the travel sites and airlines.



I noticed before the opening, that PCLN looked down at least 30 points. The key was that on a daily PCLN still looked OK. So a long trade was possible, to take advantage of the overreaction.

When I trade extremely volatile stocks, I go with a 1 minute chart to time entries. As seen in the following chart, after 2 minutes, PCLN formed a DOJI followed by a move over the high of the DOJI. That was your key to buy.

That level was about 1314. After about 10 minutes, PCLN formed a reversal candle right at ATR trailing stop resistance. The follow through candle under on the next bar was your signal to exit. The trade was good for 8 points !!!


NOTE: The key to these trades is to be incredibly disciplined with the candles. The minute the candles reverse, you have to exit the trade.

Get more of Chris Brecher’s trade setups, analysis, & market commentary on Simpler Stocks.

Chris Brecher

Chris Brecher Stock Vice President

Chris Brecher grew up in Jacksonville, Florida. Though he went to college for Paleontology and Marketing, he settled for being a Stock Broker. In watching the brokers in his office lose every time by taking shots in options, Chris wanted to find out who was making money on the other side.

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