Simple ABC Correction

As of 11/27/2023

Indus: 35,333 -56.68 -0.2%

Trans: 14,904 -190.22 -1.3%

Utils: 866 -0.47 -0.1%

Nasdaq: 14,241 -9.83 -0.1%

S&P 500: 4,550 -8.91 -0.2%

YTD

+6.6%

+11.3%

-10.5%

+36.1%

+18.5%

Targets Overview: 11/14/2023

35,450 or 34,050 by 12/01/2023

15,400 or 14,150 by 12/01/2023

900 or 825 by 12/01/2023

14,450 or 13,550 by 12/01/2023

4,600 or 4,350 by 12/01/2023

Chart Pattern Indicator:

on 11/17/23

As of 11/27/2023

Indus: 35,333 -56.68 -0.2%

Trans: 14,904 -190.22 -1.3%

Utils: 866 -0.47 -0.1%

Nasdaq: 14,241 -9.83 -0.1%

S&P 500: 4,550 -8.91 -0.2%

YTD

+6.6%

+11.3%

-10.5%

+36.1%

+18.5%

Targets Overview: 11/14/2023

35,450 or 34,050 by 12/01/2023

15,400 or 14,150 by 12/01/2023

900 or 825 by 12/01/2023

14,450 or 13,550 by 12/01/2023

4,600 or 4,350 by 12/01/2023

Chart Pattern Indicator:

on 11/17/23

Bulkowski on the Simple ABC Correction

The simple ABC correction is a measured move down chart pattern nested inside a measured move up. If measured moves are unfamiliar, then click the associated link for more information. My book, Encyclopedia of Chart Patterns

Encyclopedia of Chart Patterns 2nd Edition book.

, pictured on the left, has a complete discussion of measured moves.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

Simple ABC Correction: Identification Guidelines

Characteristic	Discussion
Nested	The simple ABC correction is a measured move down chart pattern nested inside a measured move up.
Chart	See the above chart. Point D must be below point C, meaning that the measured move down (MMD: EABC) must not correct too far. MMDs that correct too far fail more often.
Corrective phase	The corrective phase of the large MMU is an MMD, like the ABC pattern shown in the above chart. Only one MMD should be present with two straight-line runs, EA and BC. Discard patterns with pronounced turning points within those two down legs.
Points	Within the MMD, points A, B, and C are below E. Be especially careful that B not be above E. Point C starts a major price up swing.

Simple ABC Correction: Trading Tips

Trading Tactic	Explanation
Trendline	Draw a trendline from E to B and extend it downward. When price closes above the trendline, buy.
Swingers	For aggressive traders, draw a trendline down from B along the tops and buy when price closes above it. A close above the intraday high at A (blue trendline) also works as a buy signal.
Buy	For conservative investors, a close above B or even E is the buy signal.
Reverse	Be prepared for price to reverse at the price of E -- 36% do and prices drop, confirming a double top.

Simple ABC Correction: Example

The above figure shows an example of a simple ABC correction chart pattern. Point A begins the chart pattern, B is the middle turning point, and C completes the pattern. Another simple ABC correction occurs at points 1, 2 and 3.

Bulkowski on the Simple ABC Correction