As of 05/22/2025   Indus: 41,859 -1.35 0.0%     Trans: 14,623 +63.98 +0.4%     Utils: 1,023 -10.48 -1.0%     Nasdaq: 18,926 +53.09 +0.3%     S&P 500: 5,842 -2.60 0.0%	YTD -1.6%   -8.0%    +4.1%   -2.0%   -0.7%	Targets    Overview: 05/12/2025     43,700 or 40,900 by 06/01/2025   16,000 or 14,000 by 06/01/2025   1,075 or 1,000 by 06/01/2025   19,500 or 17,700 by 06/01/2025   6,000 or 5,600 by 06/01/2025
Chart Pattern Indicator: on 5/19/25

As of 05/22/2025   Indus: 41,859 -1.35 0.0%     Trans: 14,623 +63.98 +0.4%     Utils: 1,023 -10.48 -1.0%     Nasdaq: 18,926 +53.09 +0.3%     S&P 500: 5,842 -2.60 0.0%	YTD -1.6%   -8.0%    +4.1%   -2.0%   -0.7%
Targets    Overview: 05/12/2025     43,700 or 40,900 by 06/01/2025   16,000 or 14,000 by 06/01/2025   1,075 or 1,000 by 06/01/2025   19,500 or 17,700 by 06/01/2025   6,000 or 5,600 by 06/01/2025
Chart Pattern Indicator: on 5/19/25

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

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$ $ $

Simple ABC Correction: Identification Guidelines

Simple ABC Correction: Trading Tips

Reference the figure on the right.

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.

-- Thomas Bulkowski

See Also

• The ABC correction is part of an Elliott wave zigzag. Read about it.
• Review the measured move down to help make sense (cents?) of the simple ABC correction.
• The measured move up is also a useful chart pattern for price prediction.
• The nature of bottoms.
• Swing rule. A reliable way to predict price targets.

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