The Sherlock’s Pipe Setup

Wanna know how to catch a falling knife without losing a few fingers?

I created the Sherlock’s Pipe strategy to identify a good risk to reward opportunity sets up following a sharp rollover.

Below is a daily BILL, which I used as a long idea in the weekend Hit & Run Stock Report based on a Sherlock’s Pipe pattern.

First, you have the steep rollover with a large range bar, often marking at least a near-term selling climax.

Then you have the dead cat bounce.

BILL bounced 100% in 6 sessions, testing its overhead 20 day moving average before pulling back to a test of lows.

Despite a distribution day in the market on Friday, BILL tailed up leaving a Lizard signal reversal buy bar.

This is a new 10 day Bottoming Tail where a stock opens and closes near the top of the sessions range after selling off.

It suggested BILL had caught a buyer(s) near a test of the low on Friday.

Monday’s spark in the overall market lit the fuse to BILL’s ‘tail.’

Hit & Run members sold half for a 3.91 gain and the other half for a 5.13 gain.

While BILL may breakout, we took the solid quick gain selling against a declining trendline and the 20 day moving average.

Next!