The markets saw a spectacular run this week, in which the Sensex gained nearly 1400 points 4-trading sessions.
The breathtaking rally was led by select stocks, which reacted to their earnings. First was Larsen and Toubro, which jumped a huge 14 per cent on a single trading day on Thursday.
The other was BPCL which jumped a huge 8 per cent following a good set of numbers.
The latter, like most other government owned banks reported a poor set of numbers, with NPAs rising. However, markets have already factored in a sharp rise in NPAs.
A few other things helped cheer the markets. First was the strong global cues, after the US Housing data pointed to a robust recovery. The second was the Morgan Stanley upgrade of the Indian markets citing cheap valuations.
It's difficult to say what could be in store for the markets next week. In all probability the markets could consolidate at these levels before moving higher.
In fact, they could turn volatile, ahead of two key events next month, including the UK referendum and the possibility of a Brexit from the EU. The other key event would be the US Fed meeting, in which there could be likelihood of a US Fed interest rate hike.
But, all that is in the latter half of June. Until then the markets may continue to consolidate and gain.
All in all, it is difficult to time the market, however, if you are looking to buy, adopt a "buy on dips" strategy, as the markets have already run-up too sharply in the last 4 sessions.