2024 Muhurat Trade: Muhurat Trading is not just a trading session, it is a ritual of optimism. The traditional one-hour trading session typically attracts low volume and less volatility, making it an excellent opportunity for tactical positioning rather than wild trading. Puneet Sharma, CEO and Fund Manager at Whitespace Alpha, recommends adopting a “butterfly option strategy” to minimize risk and follow smart tactical positioning during the Muhurat trading session.
“So while the market may be acting calm, savvy investors can still have some fun with strategic moves like the butterfly option strategy. While the market is in a correction phase, now is the best time to act wisely rather than be aggressive, ” Sharma said.
“Enter the Butterfly Strategy. Now, things get interesting. The Butterfly Options Strategy is perfect for this session. Think of it as a calculated dance where you limit your risk but still position yourself for some upside. ,” added Sharma.
Here is the structure of Puneet Sharma’s butterfly strategy:
• Buy a call option with a lower strike price.
• Sell two calls at the mid-strike price.
• Buy a call option with a higher strike price.
This setup can allow you to profit if the market remains stable, which is very likely to happen during Muhurat trading. It’s like flying under the radar, staying within a clear range while minimizing downside risk.
Why use this strategy?
1. Small fluctuations and high precision: Muhurat Trading is not the time to make big moves, and this is where the butterfly spread excels. “You bet on the market and stay within a certain range, usually during this time. It’s like planning a party and you already know that most of the guests won’t make a scene!
2. Limited risks, guaranteed returns: The advantage of this strategy is that the risk is limited. Investors know exactly what they are putting on the table, and in exchange, they receive a clear return if the market remains at expected levels.
3. Time decay works for you: The options are all about time, and in this short session, theta decay (time decay) is your friend. The option to sell loses value quickly, increasing your potential earnings with little effort. It’s like letting time work its magic while you sit back and enjoy it.
“During market corrections, it is crucial to keep risk control in mind. The butterfly strategy during Muhurat Trading allows you to participate in the market while maintaining balance. It is not about chasing crazy returns, but about smart positioning, which is what we want Wanted.
Popular industries worthy of attention in Samvat 2081
Lemonn’s marketing department said the three most noteworthy sectors for the new Samvat are information technology (IT), fast-moving consumer goods (FMCG) and pharmaceuticals.
it:
The IT industry is becoming a key area of concern, showing solid profit performance, and is also one of the most noteworthy industries. Nifty IT index reported profit growth of 15.3% year-on-year, basically in line with expectations. Revenue growth also showed promise, with an annual increase of 7.3%, slightly higher than expected, but the outlook remains cautiously optimistic.
Notably, there are encouraging signs of rebound in discretionary IT spending in the banking, financial services and insurance (BFSI) industry, which is the largest contributor to IT revenue. The management team expressed confidence in the strengthening deal pipeline and reduced uncertainty in the second half of FY25, especially as the Federal Reserve initiates a rate cutting cycle following the upcoming election.
FMCG:
Despite some setbacks in the Q2 FY25 earnings season, the outlook for FMCG remains positive. Around 67% of the earnings came from the Nifty FMCG segment and a 50-50 split between earnings misses and beats was observed, which was disappointing compared to initial expectations.
Several major players in the FMCG space have highlighted challenges such as slowing urban demand and rising raw material costs that are putting pressure on margins. However, top-line growth remained strong, driven by resurgent rural demand.
Going forward, continued recovery in the rural market on the back of a strong monsoon season, coupled with expectations of stable urban demand trends, is expected to rebound in the second half of FY25. The sector’s inherent defensiveness puts it well-positioned during periods of volatility, and any recent weakness in specific stocks appears to have resulted in a number of negative surprises.
Pharmaceutical:
Pharmaceuticals is one of our top picks going forward due to its strong earnings visibility and defensiveness against market volatility. Strong earnings in the first quarter of fiscal 2025, coupled with industry rotation and favorable conditions for U.S. generic drug pricing, further enhance our positive outlook. These factors make the pharmaceutical industry a compelling growth opportunity.
Disclaimer: The views and recommendations provided in this analysis are those of the individual analysts or brokerage firms and not of Mint. We strongly recommend that investors consult a certified expert before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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