L-Shaped Short Pattern

[Mike]

NUS set up a possible L-Shaped shorting pattern. In Bill O'Neil's/Gil Morales' book How to Make Money Selling Stocks Short this was identified as a sharp drop and then a tight sideways pattern as the stock does not have enough energy to rise in price. In one case they identified the pattern as "walking the plank", a reference to the practice of punishing wayward pirates by making them walk the plank into the ocean. The chart below shows the NUS L pattern. The job for someone wishing to short this pattern is to get short as high in the sideways consolidation as possible and wait for a drop. Essentially anywhere in the range of 81-90.