- This refers to a consolidation in the price of a stock or any other financial security after a strong rally.
- The price of the security moves sideways rather than upwards or downwards during such price consolidation.
- Time correction is different from price correction where the price of an overvalued stock or other security falls to a level that is commensurate with its fundamental intrinsic value.
- During time correction, the security trades within a strict price range and waits for its fundamental value to rise and match its current trading price range.
- Traders usually buy securities that breakout from a price range after a long period of time correction.