Samvat 2080: 5 tips for investors to make the most of muhurat trading session

The session comprises a 15-minute pre-opening and closing period, with all trades executed on the same day. This condensed timeframe adds an element of excitement and volatility to the market movements during this special session.

Block deal session, where two parties agree to buy/sell a security at a fixed price and inform the stock exchange about it

Pre-open session, where the stock exchange determines the equilibrium price (usually around eight minutes)

Normal market session is the one-hour session where most trading takes place

Call auction session, where illiquid securities are traded. Security is termed illiquid if it satisfies the criteria set by the exchange.

Closing session, where traders/investors can place a market order at the closing price

In both 2021 and 2022, Sensex and Nifty recorded gains of 0.49% and 0.88%, respectively during Muhurat Trading sessions. While past performance is not indicative of future results, these positive trends highlight the potential profitability of Muhurat Trading.

Harjeet Singh Arora, Managing Director at Mastertrust, emphasises the need for meticulous planning during Muhurat Trading.

"Setting clear financial goals, whether for short-term gains or long-term investments, is paramount. Thorough research, focusing on strong fundamentals, positive earnings reports, and growth potential, is crucial within the short time frame of the session," he said.

Given the inherent volatility of Muhurat Trading, managing risks becomes critical. Diversification, even within this brief window, is key.

Experts caution investors against concentrating all investments in one stock or sector. Additionally, liquidity is emphasised, especially for intraday traders, urging them to choose stocks with sufficient liquidity for smooth trade execution.

Traders must keep a close eye on the resistance and support levels.

"During sessions, it has been observed that the markets can be volatile with no specific direction. Hence, as a day trader, keeping the resistance and support levels at the center of trading decisions will help traders make better decisions," as per Groww.

Investors must ensure that they stick with the fundamentals of a company before investing in its stock for the long-term.

"The session is usually filled with a lot of excitement and rumors can spread fast. Stick with the basics and invest in sync with investment plan and risk tolerance," Groww noted.

Traders should ensure that they choose stocks with good trading volumes since the trading window is only for one hour.

According to Arora of Mastertrust, the market looks set to continue its positive momentum into Vikram Samvat 2080.

"Big players like global banks and financial institutions are feeling optimistic about India.  Adding to the positive vibe, foreign direct investment (FDI) in India hit $83.6 billion in 2021-2022, up from $45.15 billion in 2014-2015. Also, there's a buzz that the US Federal Reserve is done raising interest rates, contributing to the overall positive outlook," he said.

Now, when it comes to one's money, it's all about balance. Arora suggests investors to make a choice between equity and gold, while matching them with goals, time horizon, and risk tolerance.

"Gold is like a financial superhero – a safe-haven asset that fights off inflation. Think of it as a long-term investment buddy rather than a short-term fling. Equity markets might be a bit of a rollercoaster, but historically, they've outshone other investments. So, if investors are in it for the long haul, the equity market could bring some impressive returns. Just remember to spread investments wisely based on risk appetite," he said.