High-frequency trading was noticed at the counters of Exide Industries, Indiabulls Real Estate, and Sterlite Technologies on April 9. Exide and Indiabulls Real Estate hit their 52-week highs.
High-frequency trading firms (HTFs) – or algo firms on steroids –use complex algorithms and powerful computers to execute trades at lightning speeds. These firms typically try to capture the spread between the spot and futures prices, but recently they have been active in small, illiquid stocks as well.
The volumes generated by them, more often than not, attracts retail investors to these stocks.
Stocks where HFTs were active on April 9:
Exide Industries
Active names and traded stake: Graviton Research Capital (0.57 percent)
Stock movement and volumes: Gained 1.84 percent to Rs 384.1 Trading volumes at 6 crore shares versus 1-month average of 92 lakh shares
Technicals: The stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: The company on April 9 entered into an agreement to acquire 26 percent stake in a company for generation and supply of solar power
Indiabulls Real Estate
Acive names and traded stake: HRTI Private Limited (0.76 percent)
Stock movement and volumes: Gained 2.81 percent to Rs 142.45. Trading volumes at 3 crore shares versus 1-month average of 3 crore shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: The company on April 8 had done preferential allotment worth Rs 1,853 Cr to re-energize business and fuel growth
Sterlite Technologies
Active names and traded stake: Graviton Research Capital (0.79 percent)
Stock movement and volumes: Gained 10.91 percent to Rs 141.25. Trading volumes at 4 crore shares versus 1-week average of 52 lakh shares
Technicals: Stock is above 50-DMA and 200-DMAFundamental trigger, if any: The company on April 8 set a floor price at Rs 119 per share for a QIP.
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