How to Trade Intraday News Event
We’ve talked before about how to trade stocks that are making big moves in the morning due to a news-based catalyst, like a new product offering or strong earnings. In fact, many of the momentum stocks we trade fall into this category.
But sometimes, big news hits during the middle of the day. So what do you do then? How do you trade an intraday news event? As you know, we trade different setups – and manage those trades differently – based on the time of day. When there’s an intraday news event, all the rules and expectations about how we trade at lunchtime, or post-lunchtime, go out the window. Instead, we utilize our favorite morning time setups – the Opening Range Breakout (ORB) and the Quick Pullback. Both can be played long or short.
On the 29th, $GEO got hit with some big news at lunchtime. What that news was isn’t so important to me – I want to see how the stock reacts. $GEO dropped hard, then began consolidating, developing a nice Opening Range Breakdown pattern. I usually wait for three candles of consolidation for this setup, which gives the EMAs time to catch up. I shorted 1500 hundred shares at $21.66 and another 1000 at $21.63, and was looking for an ultimate low of $21, as I expected it would find some support there.
I scaled out along the way, with an eventual profit of $1500. Check out this quick video, and email me at firstname.lastname@example.org with any questions!