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It was an action-packed week, with markets volatile but range-bound for the first four days. On Friday, it appeared that markets had taken steroids and gained sharply, making new highs on an intraday basis as well as a closing basis.  

The sector rotation continues unabated, and there is just a single point agenda that markets must be up and up and up.

Friday's post-TCS results were the turn of the IT sector, and during the week, it was helped by sharp moves in the FMCG sector as well. At the end of the week, with markets gaining on two of the five trading sessions and losing on three, BSESENSEX was up 522.74 points or 0.65 per cent, to close at 80,519.34 points.

NIFTY gained 178.30 points or 0.73 per cent to close at 24,502.15 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.65 per cent, 0.58 per cent and 0.47 per cent respectively. BSEMIDCAP gained 0.15 per cent, while BSESMALLCAP was down 0.26 per cent.

The gains made on Friday were 624 points on BSESENSEX and 187 points on NIFTY, indicating that without Friday's gains, markets were actually in the negative. The intraday highs on BSESENSEX were at 80,893.51 points, while the closing high was at 80,519.34 points. On NIFTY, these levels were at 24,592.20 points on an intraday basis and at 24,502.15 points on a closing basis.

The Indian Rupee lost 6 paise or 0.07 per cent to close at Rs 83.54 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 625.03 points or 1.59 per cent to close at 40,000.90 points.

In primary market news, there were two listings which happened in the week gone by. The first share to list was Emcure Pharmaceuticals Limited, which had issued shares at Rs 1,008. The discovered price was Rs 1,325, a gain of Rs 317 or 31.45 per cent. By the end of the day, the share gained some ground and closed at Rs 1,358.85, a gain of Rs 350.85 or 34.80 per cent. At the end of the week, the share gained some more and closed at Rs 1,361.95, a gain of Rs 363.95 or 35.11 per cent. Emcure shares were listed on Wednesday, July 10.

The second share to list also on Wednesday was Bansal Wires Limited. The company had issued shares at Rs 256. The discovered price was Rs 352.05, a gain of Rs 96.05 or 37.51 per cent. By the end of the day, the share lost some ground and closed lower at Rs 350.30, a gain of Rs 94.30 or 36.83 per cent. By the weekend, the share gained further ground and closed at Rs 356.40, a gain of Rs 100.40 or 39.22 per cent.

TCS declared results on Thursday, July 11. The company reported revenues of Rs 62,613 crore for the quarter against Rs 59,381 crore in the previous year. Profit after tax was at Rs 12,105 crore versus Rs 11,120 crore. The EPS was at Rs 33.28 versus Rs 30.26. The results could be termed as decent but certainly not inspiring.

The share gained Rs 262.20 or 6.68 per cent on Friday post the results. TCS was instrumental in pushing benchmark indices up to a great extent. No other IT company has as yet declared results, and on the back of TCS, the IT sector gained a whopping 3.5 per cent for the week.

The budget is a mere six trading sessions away, with there being a trading holiday on Wednesday, July 17, and the budget to be presented on Tuesday, July 23. Markets have not built up a big wish list as yet, however, markets have gained substantially. This is a cause for worry. The last 10,500 points on BSESENSEX and 3,400 points on NIFTY have come in double quick time and have happened in just about five weeks' time. This is too much in too short a time. To make markets healthy and sustainable, we need a correction, and we need it now. Whether they will oblige or not, only time will tell.

The strategy for the four-day week ahead would be to continue to take money off the table and move out of momentum stocks. Allow the budget to be presented as there could be some populist measures with some hard decisions also being taken.

While in terms of overall, the budget would be growth-oriented and conducive to development, the fine print could always have areas of concern. It, therefore, makes sense to lie low over the next six sessions and allow the budget to be presented and sink in.

Post the same, it would be a good time to have a relook at markets and make a better choice and selection for the long term. Targets at such elevated and new levels are not necessary and suffice it to say that we have plenty of support at various levels, which would act as comfort if markets were to correct.

Trade cautiously and avoid the temptation of buying in a red-hot market.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)