A simple approach is:
function ticker(el, duration) {
    if (!el) {
        return false;
    }
    else {
        el = typeof el === 'object' ? el : $(el);
        duration = duration || 500;
        $(el).find('li').first().slideUp(duration, function() {
            $(this)
                .insertAfter($(this).nextAll('li').last())
                .fadeIn(duration, function(){
                    ticker(el, duration);
                });
        });
    }
}
You can call this with a jQuery object:
ticker($('#ticker'));
JS Fiddle demo.
Or using a plain DOM node, with a specified duration (in milliseconds):
ticker(document.getElementById('ticker'), 300);
JS Fiddle demo.
In response to the comment left by the OP (in comments, below):
This solution slides up the first item and fades in the last one. but I want fade+slide at both first and next items. the list is styled so just one item displayed at a time.
I offer this, using animate() to animate the height/opacity of the list elements:
function ticker(el, duration) {
    if (!el) {
        return false;
    }
    else {
        el = typeof el === 'object' ? el : $(el);
        duration = duration || 500;
        var first = el.find('li').first(),
            last = first.nextAll().last(),
            h = last.height();
        first.animate({
            height: 0,
            opacity: 0
        }, duration, function() {
            $(this).insertAfter(last).animate({
                height: h,
                opacity: 1
            }, duration, function() {
                ticker(el, duration);
            });
        });
    }
}
JS Fiddle demo.
Edited following clarification from OP, to the following:
function ticker(el, duration) {
    if (!el) {
        return false;
    }
    else {
        el = typeof el === 'object' ? el : $(el);
        duration = duration || 500;
        var lis = el.find('li').css('display', 'none');
        lis.first().fadeIn(duration, function(){
            $(this).slideUp(duration, function(){
                $(this).insertAfter(lis.last());
                ticker(el, duration);
            });
        });
    }
}
JS Fiddle demo.
References: