I woke up this morning, grabbed my coffee, and saw the headline: Stellantis (STLA) reports a €22.3 billion loss. My first thought wasn't 'sell'. It was 'opportunity'. While the news wires and social media are filled with panic, my charts are screaming one thing: capitulation. This is the kind of setup I quit my marketing job for back in 2019. It’s pure, unadulterated fear meeting technical support. And I'm here for it.

Let's be real. The people panic-selling STLA this morning are the last to the party. The smart money, the institutions, they've known this was coming for weeks. The pre-earnings drift down told you everything you needed to know. Today's massive gap down isn't the beginning of the move; it's the dramatic, headline-grabbing end of it. It's designed to shake out the last of the weak hands.

I'm sure Sarah Chen could give you a brilliant fundamental breakdown of the why behind the loss. And that's valuable context. But as a trader who lives and dies by price action, the 'why' is just noise after the fact. The chart has all the information I need. Price pays.

This is a classic lesson in how to read candlestick patterns. The stock gapped down hard at the open, nuking from around €18.50 to open near €15.00. Then, in the first hour, it flushed all the way down to €13.80 before aggressively buying back up. That, my friends, is a capitulation wick. It’s a giant red flag for shorts and a potential green light for disciplined longs.

That wick into the €13.80 level on monster volume tells me one thing: sellers are exhausted. Every last stop loss was triggered, every margin call was met, and then buyers stepped in with force. This wasn't a slow bleed; it was a liquidation event. And those often mark significant short-term bottoms.

• Major Support Zone: €13.50 - €13.80. This is the line in the sand. This is where the buyers showed up.
• My Entry Zone: I'm stalking a long entry on a retest of the €14.00 - €14.25 area. I don't chase the initial bounce.
• Initial Profit Target: The bottom of the gap fill around €16.50. That's my first target.
• Hard Stop Loss: A daily close below €13.40. No questions asked. Plan the trade, trade the plan.

This whole move is a textbook example of support and resistance trading. The plunge to €13.80 was designed to hunt liquidity sitting below the old €15.00 support. The market makers cleaned house. Now, the real test is if that €13.80 level holds. The violent rejection suggests it will. My risk/reward on this setup is clean. An entry at €14.10, a stop at €13.40 (risking €0.70), and a target of €16.50 (reward of €2.40) gives me a fantastic 3.4R trade. These are the only trades I take.

It’s all psychology. As Alex Volkov often points out, markets are driven by fear and greed. This move is 100% fear. And my job as a trader is to be greedy when others are fearful, but only when the chart gives me a clear reason and a defined risk. This chart does.

Look, I could be wrong. I've blown up two accounts in my career by thinking I was smarter than the market. If STLA closes below that €13.40 level, my thesis is toast, and I take my small loss. I'll have to fight the urge to revenge trade it. But the setup is there. The biggest opportunities often come when the news and the price action tell two completely different stories.

So, am I crazy for trying to catch this falling knife, or is this the most obvious contrarian trade on the board right now?