Muhurat Trading 2024: What should be your strategy this year?

Muhurat Trading 2024: As the festival of lights unfolds, India's stock markets celebrate with Muhurat Trading, a symbolic one-hour session marked by optimism and tradition. Since its inception in 1957 at the Bombay Stock Exchange (BSE) and later embraced by the National Stock Exchange (NSE) in 1992, this unique trading window has become an annual fixture on Diwali. This year’s Muhurat Trading session will take place on Friday, November 1, 2024, from 6:00 PM to 7:00 PM, marking the beginning of the new Hindu calendar year, Samvat 2081.

The Significance of Muhurat Trading

Muhurat Trading is more than just a market event; it’s a blend of tradition and market participation. Diwali’s auspicious day brings investors, traders, and institutions together in a brief, ceremonial trading session, believed to bring prosperity and good fortune for the new year. Buying stocks during this time is seen as a ritual, where shares symbolize a fresh start and blessings for financial success. While the session tends to be quieter in terms of trading volume, the optimism and sentiment surrounding it make it a significant occasion in the Indian financial landscape.

Nifty and Bank Nifty Technical View

As Muhurat Trading approaches, analysts are closely watching key indices. Nifty closed recently at 24,205.35, down 0.56%, while Nifty Bank settled at 51,475.35, down 0.64%. Om Mehra, Technical Analyst at SAMCO Securities, highlighted critical support and resistance levels for both indices. If Nifty maintains its position above 24,300, short-term buying opportunities could emerge despite the current bearish outlook. Nifty faces resistance at 24,400 and 24,500, while Nifty Bank’s support lies at 51,100 with resistance at 52,000. The rise in India’s VIX volatility index above 15 suggests that traders should brace for potential market swings during this session.

Muhurat Trading Technical Strategy

Given the one-hour duration, strategy and discipline are paramount. Mehra advises focusing on specific support and resistance zones, with the Volume Profile from the first 15 minutes as a tool for identifying reliable levels. Combining techniques like Fibonacci retracements and volume trends with technical indicators, such as RSI and MACD, can help pinpoint effective entry and exit points. Trading smaller trends through patterns like flags, triangles, or inverse head and shoulders, supplemented by candlestick formations like doji or engulfing patterns, can provide clearer setups during this session. Given the brief timeframe, strict risk management and stop-losses are essential, while large, aggressive positions are best avoided to minimize potential downsides.

A Long-Term Outlook for the Indian Markets

Looking beyond Muhurat Trading, analysts have a positive outlook for Indian markets over the next year. Aditya Agarwal, Head of Derivatives and Technical Analysis at Sanctum Wealth, expressed optimism for medium- to long-term performance, expecting mid-double-digit returns over the coming 12 months. However, in the short term, Agarwal warns of potential volatility and a 4-5 percent correction, advising investors to stay cautious. He favors large-cap stocks over mid- and small-caps, noting that market heavyweights are more likely to outperform through 2024.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.