Nifty : Expanded Flat Correction?

Last few days have been very unkind to bulls, who were enjoying non stop rallies. Bears were in a shell as each of their attempt to pull the market resulted in even fiercer rally, especially in the mid cap market where rallies of 20% every alternate day in some stocks was routine.

As I have been writing the lethargic moves in the range of 5200 to 5300 resulted in a huge volatility expansion, I too read the market incorrectly as it made a failed 5th wave in the rise from 4807 to 5293.

Now it seems that the scenario of an expanded flat correction is playing out which should take Nifty to atleast 4450 if not lower in the current correction. Watch out for a 5 wave bear pattern in the wave developing. Interesting to note is that there is always a time and price relation between wave A and C in such a pattern. Which means that a fall from 5182 to 4539 in 10 trading days should be in ratio with a fall from 5293 to 4428. Rough calculation gives us a timeline of 14 trading days. We are already done with 7 trading days and the remain 7 trading days certainly do not look bright if we are to reach 4450 (a fall of another 400 points in 7 days!!)

But in markets anything is possible. As of now we are highly oversold in daily charts and there should be some technical rally of nearly 100 points so as to make way for next wave of selling. Lets see if that happens. Currently bulls who ruled the world few days back are only at the mercy of bears. Tomorrows expiry promises to be an interesting one, how much of long is still waiting to be unwound is to be seen. A breach of 4800 surely will create panic and who knows my target of 4450 will have to be revised downwards.