High-frequency trading firms look particularly active in Reliance Power, Indiabulls Real Estate and Vakrangee, flipping trades and pocketing a quick buck. The stocks gained 7-18 percent as trading volumes jumped multi-fold compared to the one-month average.
High-frequency trading firms (HTFs) – or algo firms on steroids –use complex algorithms and powerful computers to execute trades at lightning speeds. These firms usually trade in highly liquid large and midcap names, but, of late, they have been active in small cap stocks as well.
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The volumes generated by them, more often than not, attracts retail investors to these stocks.
Stocks where HFTs were active on January 4:
Indiabulls Real Estate
Active names and traded stake: Graviton Research (0.7 percent), HRTI Pvt Ltd (0.6 percent). Heavy HFT activity in December too.
Stock movement and volumes: Gained 6.7 percent to Rs 94.35. Trading volumes at 5 crore shares versus one-month average of 3 crore shares
Technicals: Stock is above its 50-DMA and 200-DMA
Fundamental trigger, if any: No
Reliance Power – an HFT favourite
Active names and traded stake: HRTI Pvt Ltd (2.7 percent), Jainam Broking (1.13 percent), Graviton Research (1.38 percent), Pace Commodity (1.38 percent)
Stock movement and volumes: Gained 17.15 percent to Rs 30.40. Trading volumes at 88 crore shares versus 1-month average of 22 crore shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: No
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Vakrangee
Active names and traded stake: QE Securities (0.76 percent), HRTI (1.35 percent), Graviton (0.9 percent)
Stock movement and volumes: Gained 10.23 percent to Rs 21.55. Trading volumes at 12 crore shares versus 1-month average of 3 crore shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: No
Sobha
Active names and traded stake: NK Securities (0.65 percent), Graviton (0.98 percent)
Stock movement and volumes: Gained 15.7 percent to Rs 1,295.25. Trading volumes at 1 crore shares versus 1-month average of 15 lakh shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: Yes. Foreign investor Dendana Investments Mauritius bought stake. The company's total sales value jumped 37 percent YoY to Rs 1,951.6 crore in Q3 FY24. Motilal Oswal said Sobha is among its top stock picks for 2024 with a target price of Rs 1,400
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