Each week, Stockhead recaps ASX stocks that are “running hot” as deduced by the Relative Strength Index (RSI).

The RSI is a technical gauge which measures how trading momentum is affecting the price action.

A reading of 70 is seen as the level at which a company may have been overbought. If a stock has a reading of 30 or below, it could be undervalued.

Click here for a more detailed rundown of what the RSI does and how it’s used.

While there’s usually a pretty good reason if a given stock is running hot (or cold), investors are also on the look out for opportunities where the price action has separated from fundamentals.

Running Hot

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, July 16:

Scroll or swipe to reveal table. Click headings to sort.

It was a good week for shareholders in Bathurst Resources (ASX:BRL), which secured a key victory in New Zealand court following a multi-year legal battle.

Shares in the company ran hot after NZ Supreme Court upheld BRL’s appeal against a lower-court judgment, which would have left it liable for a US$40m performance payment in connection with a 2010 deal to purchase coal assets from L&M Coal Holdings.

Two other companies ran hot following a round of M&A activity, including food delivery company Youfoodz (ASX:YFZ) which got a takeover priced at 93c (well below its 2020 listing price of $1.50).

Online car marketplace platform iCar Asia (ASX:ICQ) also came into the sights of a bigger player following a bid from Malaysia-based Carsome Group Pte Ltd.

Elsewhere, mid-cap stock Macquarie Telecom Group (ASX:MAQ) recorded a 14-day RSI of 84 after eight straight days of steady gains, capped off by a 15% jump on Wednesday when it announced application plans to build a new data centre at Macquarie Park Data Centre, and reconfirmed its full-year earnings guidance.

And there was an appearance from Retail Food Group (ASX:RFG), which has climbed from 7c to above 9c over the past week.

That marks a far cry from the halcyon days above $5 when the company oversaw a franchise network of more than 2,500 stores. The company has turned its focus in recent years to paying down debt and running a leaner store model.

Running Cold

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, July 16:

Scroll or swipe to reveal table. Click headings to sort.

Among the stocks running cold this week was uranium play Berkeley Energia (ASX:BKY), which copped a regulatory blow when Spanish authorities declined to give the go-ahead for the construction of a uranium concentrate plant.

BKY said it will “strongly defend its position and will immediately consider the range of legal options available to it in relation to the adverse decision”.