The AB=CD pattern is a popular harmonic pattern in technical analysis, used to identify potential reversals in the market. The bearish AB=CD pattern indicates a potential price reversal from an upward trend to a downward trend. Here's how it works and what to look for:
Components of the Bearish AB=CD Pattern AB Leg: The initial upward move (AB). BC Leg: A correction or retracement from the AB move (BC). CD Leg: A continuation of the trend in the same direction as AB, ideally mirroring the length and duration of the AB leg (CD).