The Muhurat trading is a non-scheduled trading session of about one hour on Diwali, the festival of lights. The stock exchange specifies the time of Muhurat trading every year. According to beliefs, people trading during this one hour have a better chance of earning wealth throughout the year.
This year, Diwali will be celebrated on Saturday, November 14 and both stock exchanges are gearing up for the trading hour scheduled for the evening from 06:15 pm to 07:15 pm.
In the words of Jaikishan Parmar—Sr. Equity Research Analyst, Angel Broking Ltd, “Muhurat is an occasion in which the investing and trading communities pay tribute to goddess Lakshmi, the benevolent deity of wealth and prosperity, and celebrate the start of ‘Samvat’ or the New Year. According to the Hindu calendar, “Muhurat” is considered an auspicious time. And during this hour planet set themselves in such a way that work done during this time gives good result and prosperity.”
Who can invest during Muhurat trading
Any investor or trader can trade on Muhurat trading.
However, Parmar suggests investors to have confidence and knowledge about the companys finances before investing.
“The trader must have identified the correct trade set up for profit. Just because it is a Muhurat session investors should not buy stock, which is not backed by fundamental and focused management,” he warns.
Key factors to check before going for investments during Muhurat trading
Above all, investors should remember that whether investments are during Muhurat trading or normal days, they should always check due diligence before investing.
“Once the company clear due diligence, an investor must go through the companys financials and what are the aspects which will drive growth and return ratio. The company should have a good reinvestment opportunity so that company can grow for multi-years. When any product is under-penetrated, the company in this segment can reinvest their profit for future growth,” he explains.
Hence, in short, a company with clear management, healthy balance sheet which has growth potential for the long term should be considered for investing.
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