A special case of a measured move up (MMU). Typically, measured moves point the direction and extent of future rate moves. An ABC correction is a frequent correction pattern that comprises three swings the third of which (Wave-C) exceeds the highest level of the first swing (Wave-A). A three-swing correction may also be an irregular ABC where the Wave-C doesn’t exceed the extreme of the Wave-A. The time and price targets to complete a three-section ABC correction can be predicted with reasonable certainty. This is based on the underlying assumption that a correction will always form at least three sections.
It is also known as a zigzag.
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